Wood's Strategic Maneuver: SpaceX Displaces Tesla from ARK Portfolio on Day of Historic IPO
June 12 was a landmark day not only for Elon Musk, whose net worth exceeded $1 trillion for the first time, but also for Cathie Wood's strategy. On SpaceX's stock market debut day, her ARK fund made a decisive shift: it purchased shares of the space company worth approximately $444 million, while simultaneously reducing its stake in Tesla. This move is a clear signal of a change in priorities for the manager, who has been one of the most vocal supporters of the electric vehicle manufacturer for decades.
The details of the deal are impressive. ARK acquired 3.29 million shares of SpaceX at the offering price of $135 per share. By the close of the trading session, this stake was worth $529.7 million, reflecting a 19% increase on the very first day. Concurrently, the fund cut its positions not only in Tesla but also in Advanced Micro Devices, Rocket Lab, Roku, and Baidu.
Why is SpaceX the new star, and Tesla on the sidelines?
Tesla shares have long been the anchor of ARK's portfolio, and Wood publicly defended the company even in its most difficult times. However, the context has now changed dramatically. Chinese competitors have nearly caught up with Tesla in production, its profitability is declining, and Musk's political activity is alienating part of the consumer base. In contrast, SpaceX, and especially its satellite internet Starlink, is showing explosive growth. This is the company's only profitable segment, and it is scaling rapidly.
It is important to note that Wood invested in SpaceX as early as the end of 2023, but those were venture capital investments. Now, after the IPO, the fund can increase its stake on the public market. Currently, SpaceX is the largest position in ARK's venture portfolio — about $1 billion. The $529.7 million purchase is a significant step even by ARK's standards, although SpaceX's cumulative loss since its founding is $41.3 billion. 30% of the offering was allocated to retail investors — three to six times the usual level, indicating high demand.
ARK's return context: a bet or a mistake?
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 Over the past 12 months, investors have withdrawn approximately $294 million in net funds from the fund.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. Wood operates on a single scenario: entering promising companies as early as possible. This was the case with Coinbase after its listing in 2021, and recently with CoreWeave. Now, with SpaceX.
My expert conclusion: The reallocation of capital from Tesla to SpaceX is not just diversification, but an attempt by Wood to restore her reputation after a series of setbacks. Starlink is a real asset with growing monetization, but the question is whether SpaceX can achieve stable profits and justify such a high valuation. If it does, this will be a triumph. If not, it will be another costly mistake in the ARK portfolio. Time will tell, but the bet has been made in a big way.