On Tuesday, investors were shocked by the news that Cathie Wood had trimmed her holdings in Musk's electric vehicle manufacturer to buy stock in another company.
Wood has become something of a tech industry oracle for retail investors thanks to her early and aggressive bets on disruptive technologies like EV and has traditionally been her top holding.
The ARK Invest firm she manages sold 15,862 shares in Musk's company and bought 158,157 shares in GM for nearly $6.1 million.
While Wood occasionally takes profits onTesla, also to ensure the fund doesn't become too top-heavy from the trillion-dollar megacap, the move is striking as even a high-quality name likeTesla has found itself in a slump due to Musk.
— 💖 T≡SLA Boomer Mama💙💛 (@MmeAlexandraS) May 10, 2022Wood might shift some of her portfolio toward an incumbent like General Motor if ARK Invest's price target of $4,600 per share is accurate.
One of the fiercest critics of both Wood andTesla, Mark Spiegel, saidHell has officially frozen over.
Wood didn't buy shares in GM because of its exposure to the EV market.
The company has been mocked by its fans for selling just 483 electric vehicles in the US over the course of six months.
GM shares were added to the ARK Autonomous Technology and Robotics ETFs. Thanks to its 80% stake in Cruise, the Detroit car company is at the forefront of the development ofrobotaxi.
Some of the highest risk, highest return stocks are in Wood's portfolio, undeterred by market weakness.
She claimed in December that Teladoc was poised for a rebound after recent losses.
She wrote at the time that innovation stocks are in deep value territory.
The Federal Reserve has proved to be an inflation-fighting agency. Its aggressive preparations for a tightening cycle have turned out to be a problem for growth-stock funds.
Her reputation for stock picking has suffered because of her conviction in the company.
Cathie Wood’s famed market-beating return has disappeared: From inception, Ark Innovation ETF has still grown to $41 from $20.12 in the last week of Oct. 2014 when it launched - a gain of ~122%. But S&P 500 had a total return of 128% over the same period. https://t.co/3HY28Tz0KC pic.twitter.com/vrI4epQFkL
— Holger Zschaepitz (@Schuldensuehner) May 10, 2022
She added to her position in the company in the run-up to its Q1 results.
When the stock lost half its value, the bet blew up in her face. The company revealed a larger than expected quarterly loss after admitting it overpaid for Livongo.
ARK Innovation is trading at levels not seen since the March 2020 lows. On Tuesday, it is trading down 5%.
Wood, a deeply religious Christian known for her close friendship with Bill Hwang, recently revealed she had founded ARK Invest with the help of the convicted Archegos hedge fund manager.
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