Cathy Wood makes a move: SpaceX in the ARK portfolio instead of Tesla amid IPO
Renowned ARK Invest fund manager Cathie Wood has made a strategic shift in her portfolio. On the day of the long-awaited SpaceX IPO, June 12, the fund purchased company shares worth approximately $444 million, while simultaneously reducing its position in Tesla. Both companies are owned by Elon Musk, but Wood's priorities have clearly shifted.
The deal took place on the listing day: SpaceX's share price surged 19% on the first day, and Musk's wealth exceeded $1 trillion for the first time. ARK bought 3.29 million shares at the IPO price of $135 per share. By the close of trading, this stake was already worth $529.7 million. On the same day, the fund cut its holdings in Tesla, as well as in Advanced Micro Devices, Rocket Lab, Roku, and Baidu.
Why is Tesla losing its appeal in ARK's eyes?
Tesla shares have long been ARK's main asset, and Wood publicly supported the company even during tough times. The situation has now changed: Chinese competitors have nearly caught up with Tesla, its profitability is declining, and Musk's political activity is alienating some buyers.
The picture is the opposite with SpaceX. Its only profitable segment—satellite internet Starlink—is growing rapidly. Wood first invested in SpaceX in late 2023, and now this company is the largest position in ARK's venture portfolio (about $1 billion). After the IPO, the fund can increase its investments on the public market.
The purchase of shares worth $529.7 million is a significant move by ARK's standards. SpaceX recorded a cumulative loss of $41.3 billion as of March 31. Retail investors have been allocated 30% of the offering—three to six times higher than the usual level.
Context of ARK's returns
Since the beginning of the year, the ARK Innovation ETF has grown only 1.61%, while the S&P 500 has gained about 9%. Over the past 12 months, investors have withdrawn a net of approximately $294 million from it. According to Morningstar, from 2014 to 2024, ARK "destroyed" about $7 billion of its investors' funds.
In the IPO sector, Cathie Wood follows one scenario: enter promising companies as early as possible. That's how ARK bought Coinbase shares shortly after its listing in 2021 and recently bet on CoreWeave. SpaceX has become the largest investment.
Whether SpaceX will turn a profit and allow for stable earnings, or become another costly mistake for ARK, only time will tell.
My expert opinion: Wood's move is a classic "entry at the start" betting on long-term growth, but SpaceX's current losses and the high share of retail investors in the IPO add risk. If Starlink continues to scale, the bet could pay off, but in the short term, it looks more like a change of favorite amid pressure on ARK's main portfolio.