Kathy Wood is moving eggs to another Musk basket: betting on SpaceX against Tesla on IPO day
June 12 became a landmark day for Elon Musk's space empire: SpaceX officially debuted on the stock exchange. Cathie Wood, known for her extreme focus on Tesla, didn't wait a moment. On the IPO day, her ARK fund purchased SpaceX shares (ticker SPCX) worth approximately $444 million, while simultaneously reducing its position in Tesla itself. This is a clear signal: priorities have shifted.
The deal was aggressive. ARK bought 3.29 million SpaceX shares at the offering price of $135 each. By the close of the trading session, the package was worth $529.7 million — a 19% increase in a single day. Musk's personal wealth exceeded $1 trillion for the first time. On the same day, Wood cut stakes not only in Tesla but also in Advanced Micro Devices, Rocket Lab, Roku, and Baidu. This is not just rebalancing — it's a strategic pivot.
Why is Tesla no longer a "sacred cow"?
Tesla shares have been the anchor of ARK's portfolio for years, and Wood publicly defended the company during its toughest times. But the picture is different now. Chinese competitors, such as BYD, have nearly caught up with Tesla in sales volumes. The electric vehicle manufacturer's profitability is declining, and Musk's political activity is starting to alienate some consumers. On the other hand, SpaceX is a story about a future that has already arrived. The company's only profitable division, the Starlink satellite internet service, is growing at explosive rates. Wood first invested in SpaceX at the end of 2023, and it is now already the largest position in ARK's venture portfolio (about $1 billion). Now, after the public listing, the fund can increase its investments on the open market.
ARK's return context: risk or genius?
Since the beginning of the year, the flagship ARK Innovation ETF has grown by only 1.61%, while the S&P 500 has gained about 9%. Over the past 12 months, investors have withdrawn approximately $294 million in net funds from the fund. According to Morningstar estimates, from 2014 to 2024, ARK "destroyed" about $7 billion of its investors' capital. Against this backdrop, the purchase of SpaceX looks like a typical Wood move: get into a promising company as early as possible. This was the case with Coinbase in 2021 and recently with CoreWeave. Now SpaceX has become her biggest bet.
My view as an analyst: Wood's decision is not panic, but a conscious reassessment of risks. Tesla faces existential challenges in the form of Chinese competition and shrinking margins, while SpaceX holds a monopoly position in commercial launches and Starlink. If Starlink achieves stable profitability, SpaceX could become the "new Tesla" for ARK. But if the space industry fails to meet expectations, this move risks becoming another costly mistake. Time will tell who was right — Cathie Wood or the market.