Wall Avenue darling misses guess on cryptocurrency firm and loss exceeds $ 280 million
Cathie Wood, creator of ARK invest, sold more than 1.4 million shares of Coinbase after falling earlier this week; Operation loss exceeds US$ 280 million
Voted the best stock picker by Bloomberg in 2020, Cathie Wood is one of Wall Street’s darlings, but like any investor, she doesn’t always get it right. And a recent mistake by the founder and CEO of billionaire asset management Ark Invest cost dearly. More exactly US$ 280 million (R$ 1.48 billion) – and all thanks to the investment in a company in the cryptocurrency market.
Cathie Wood became famous for creating, in 2014, actively managed funds and ETFs focused on investing in companies that develop disruptive solutions and innovations, which initially was criticized for its high risk. However, over time, bets on companies like Tesla, for example, proved successful, and the “Investment Queen” won thousands of fans – and the glorious nickname.
With a bold profile and interest in new technologies, it didn’t take long for Cathie and the crypto market to cross paths. She has become one of the most important voices in the traditional financial market to speak actively and favorably about digital assets. And, more than talking, investing. In interviews, it is common to hear her talk about the subject, making predictions of strong highs for bitcoin in the long term or, as happened recently, commenting on the positive side of the price drop in the crypto market.
But one of his industry-related ventures ended up not working out. ARK made a hefty investment in Coinbase shares around the time of the crypto exchange’s IPO in April last year. The average price of the papers was US$ 254.65. And last Tuesday, the 26th, the company ended up getting rid of the position, selling the shares for $53.
According to data released by the Unusual Whales platform, Cathie and ARK Invest disposed of 1.41 million Coinbase shares, causing the brokerage’s stock trading loss to exceed $280 million.
The sale came as Coinbase’s shares hit the lowest value in its history, following yet another brokerage scandal, this time related to an SEC investigation into an alleged irregular offering of securities in the US. Over the course of the day, COIN shares fell more than 20% – on Wednesday, however, they are rehearsing, up 6%, trading at US% 55.90.
The first major company in the crypto market to go public in the US, Coinbase has seen a strong devaluation of its shares in 2022. The fall in the year is already over 77%, motivated by the bad moment of the crypto market and also by problems related to the balance sheet numbers of the company, whose revenue was far below expectations in the last quarter.
ARK’s funds and ETFs have also suffered in the same period, as they mostly invest in technology company stocks, which have also been experiencing a negative moment since the beginning of the year. The performance of ETFs such as ARKK (-48%), ARKW (-50.5%) and ARKF (-54.76%) are examples of how bad the situation is for the company in 2022.
The result, however, is not exclusive to Cathie Wood and ARK Invest, as risk markets have “bled” a lot in recent months, negatively driven by the global macroeconomic context, which includes high inflation and interest rates in the US, slowdown in Chinese economy, crisis in Europe and war in Ukraine.
Despite the bad results so far, ARK remains active in the market. Also according to Unusual Whales, the manager this Wednesday bought about 1.76 million shares of Shopify, which operate up 5.5% at the moment, quoted at US$ 33.30.