Wood's Strategic Pivot: SpaceX Ousts Tesla from ARK Portfolio on Listing Day
June 12 became a landmark day for Cathie Wood's stock empire. On the day of SpaceX's long-awaited IPO, her ARK fund executed a massive rebalancing, purchasing shares of the space giant worth approximately $444 million while simultaneously reducing its stake in Tesla. This move clearly signaled a shift in priorities: both companies are owned by Elon Musk, but ARK analysts, it seems, see more potential in space than in electric vehicles.
The trades were executed on the very first day of public trading for SpaceX. The offering price was $135 per share, and by the close of the session, the shares had surged 19%. The package of 3.29 million shares purchased by ARK instantly appreciated to $529.7 million. On the same day, the fund cut positions not only in Tesla but also in Advanced Micro Devices, Rocket Lab, Roku, and Baidu.
Why is Wood betting on SpaceX?
Tesla has long been the flagship asset of ARK, and Wood publicly defended the company even during its darkest times. However, the picture has now changed. Chinese competitors such as BYD have nearly caught up with Tesla in sales volumes, business margins are declining, and Musk's political activism is alienating some consumers. Against this backdrop, SpaceX looks far more attractive. The company's only profitable division — the Starlink satellite internet service — is showing explosive growth in its subscriber base. Wood first invested in SpaceX back in late 2023, and it is now 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.
Context of ARK's performance
It is worth noting that Wood's decision to shift money from Tesla to SpaceX comes amid less-than-stellar performance by the fund itself. Since the start of the year, the ARK Innovation ETF has risen 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 Over the past 12 months, investors have withdrawn approximately $294 million in net funds from the fund.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, from 2014 to 2024, ARK "destroyed" about $7 billion of its investors' capital. In this situation, the bet on SpaceX looks like a desperate attempt to find a new growth driver.
Wood's strategy in the IPO sector has always been the same: enter promising companies as early as possible. This was the case with Coinbase in 2021 and with CoreWeave recently. However, SpaceX is a bet of a completely different scale. Whether the space giant will pull ARK into positive territory or become another costly mistake — only time will tell.
My expert opinion: The flow of capital from Tesla to SpaceX is not just a rotation within the portfolio, but a signal of a deep structural shift. The EV market is becoming increasingly competitive and commodity-oriented, while SpaceX occupies a unique monopoly niche in the space economy. However, investors should remember: SpaceX's cumulative loss as of the end of March was $41.3 billion, and the path to stable profitability could be long. This is a bet on the future, not on current cash flows.