Kathy Wood makes a move: SpaceX gets priority over Tesla on the day of the historic IPO
June 12 became a landmark day not only for Elon Musk but also for ARK Invest's strategy. On the day of SpaceX's long-awaited IPO, Cathie Wood made a decisive move, reallocating capital in favor of the space company by reducing her stake in Tesla. This decision clearly demonstrates a shift in priorities within Musk's empire in the eyes of one of the market's most influential investors.
Billion-Dollar Bets: Buying SpaceX and Selling Tesla
On the day of SpaceX's stock market debut, the ARK fund purchased approximately 3.29 million shares of SPCX at an offering price of $135. By the close of the trading session, this stake was valued at $529.7 million, reflecting a 19% increase on the very first day. Simultaneously, ARK reduced its positions in Tesla, as well as in Advanced Micro Devices, Rocket Lab, Roku, and Baidu.
It is important to note that SpaceX is not a new asset for Wood. She first invested in the company back in late 2023, and currently, SpaceX is the largest position in ARK's venture portfolio, exceeding $1 billion. However, now that it has entered the public market, the fund can increase its investments without the restrictions typical of private investments.
Why is Tesla Losing Ground?
For a long time, Tesla shares were ARK's main asset, and Cathie Wood publicly supported the company even during its toughest times. The situation has now changed. Chinese competitors, such as BYD, have nearly caught up with Tesla in production volumes, the company's profitability is declining, and Musk's political activity is alienating some consumers. Against this backdrop, SpaceX looks more promising: its only profitable segment—satellite internet Starlink—is showing rapid growth.
ARK's Performance Context: Risk or Genius?
Since the beginning of the year, the 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 Over the past 12 months, investors have withdrawn approximately $294 million in net funds from the fund.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 analysts' estimates, from 2014 to 2024, ARK has "destroyed" about $7 billion of its investors' capital.
In the IPO space, Cathie Wood follows a single scenario: enter promising companies as early as possible. This was the case with Coinbase in 2021 and recently with CoreWeave. SpaceX has become the largest investment. The question remains whether the company can achieve stable profits and justify such an aggressive bet, or whether this will become another costly mistake.
My opinion: The flow of capital from Tesla to SpaceX is not just diversification but a clear signal to the market. Wood is betting that the future lies in space technology and communications, not in electric vehicles, where competition is becoming cutthroat. However, SpaceX's massive accumulated losses ($41.3 billion) and the volatility of the IPO market make this deal extremely risky. Time will tell whether this was a brilliant bet on a new technological cycle or yet another expensive miscalculation.