Cathie Wood makes a major bet on SpaceX, reducing positions in Tesla on the day of its historic IPO
Renowned ARK Invest fund manager Cathie Wood made a landmark move on the day of SpaceX's long-awaited initial public offering (IPO). Instead of increasing her stake in Elon Musk's "sister" company, Tesla, Wood bet on the space giant, purchasing shares of the new exchange-traded instrument SPCX for approximately $444 million. Simultaneously, the fund reduced its position in Tesla, as well as in shares of Advanced Micro Devices, Rocket Lab, Roku, and Baidu.
The trades were executed on June 12 — the day SpaceX shares debuted on the exchange, showing an impressive 19% gain by market close. ARK purchased 3.29 million shares at the offering price of $135 each. By the end of the trading session, this stake was valued at $529.7 million. This is the largest single purchase in the fund's history, underscoring the exceptional confidence of ARK analysts in the future of Musk's space business.
Why is Wood changing priorities?
Tesla shares have long been a blue-chip stock in ARK's portfolio, and Wood publicly defended the company even during its toughest times. However, the situation has now changed dramatically. Chinese competitors such as BYD and NIO have nearly caught up with Tesla in sales volumes and technology. Tesla's own profitability is declining, and Musk's political activity is beginning to alienate part of its loyal audience. Investors see that the growth potential of the electric vehicle giant is starting to wane.
With SpaceX, the picture is the complete opposite. The company's only profitable division — Starlink satellite internet — is showing explosive growth. Wood first invested in SpaceX back in late 2023, and this asset has now become the largest position in ARK's venture portfolio (about $1 billion). With the public market listing, the fund can increase its investments without the restrictions typical of private placements.
It is worth noting that 30% of the offering has been allocated to retail investors — three to six times higher than the usual level. Meanwhile, SpaceX's cumulative loss as of March 31 stands at $41.3 billion. Nevertheless, the market values the company at over $1 trillion, making it one of the most expensive in the world.
Context of ARK's performance
This move comes amid challenging results for the fund itself. Since the beginning of the year, the ARK Innovation ETF has risen only 1.61%, while the S&P 500 index 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.
Wood follows a single playbook: enter promising companies as early as possible. This was the case with Coinbase in 2021, and more recently with CoreWeave. Now SpaceX has become the largest investment. The question is whether the company will achieve sustainable profitability and allow for steady earnings, or whether this will become another costly mistake for ARK.
Cryptalist Expert Opinion: The capital shift from Tesla to SpaceX is not just diversification, but a clear signal to the market. Wood sees that Musk's future lies not in electric vehicles, but in space and satellite technology. Starlink is already generating real revenue, and if SpaceX can monetize its infrastructure, this could become one of the most successful investments of the decade. However, given the company's losses and aggressive valuation, the bet remains extremely risky. Time will tell who is right — the optimists or the pragmatists.