Cathie Wood Watch: Ark Sells Social Media and Defense, Buys Gambling

Investment star Cathie Wood, chief executive of Ark Investment Management, on Monday bought and sold a number of household names as the stock market struggles.

On Monday, she bought shares of financial-services company Block  (SQ) – Get Block Inc Class A Report, online sports gambling platform DraftKings  (DKNG) – Get DraftKings Inc Class A Report, and e-commerce stalwart Shopify  (SHOP) – Get Shopify, Inc. Class A Report

Ark exchange-traded funds sold aerospace defense contractor Lockheed Martin LMT, social media titan Twitter  (TWTR) – Get Twitter, Inc. Report, and online arts and crafts retailer Etsy  (ETSY) – Get Etsy, Inc. Report.

Ark Next Generation Internet ETF  (ARKW) – Get ARK Next Generation Internet ETF Report bought 51,943 shares of Block valued at $5.1 million. The same fund purchased 279,441 shares of DraftKings, valued at $5 million. Both valuations are as of Monday’s close. 

And Ark FinTech Innovation ETF  (ARKF) – Get ARK Fintech Innovation ETF Report bought 6,826 shares of Shopify, valued at $3.8 million as of Monday’s close.

Ark funds sold 8,713 shares of Lockheed Martin, valued at $4.1 million. Ark funds dumped 368,744 shares of Twitter, valued at $12 million. Finally, Ark FinTech Innovation unloaded 15,003 shares of Etsy, worth $2.1 million. The three valuations are as of Monday’s close.

Block, DraftKings Commentary

Last month, Ark offered commentary about Block, after it released fourth-quarter earnings. “Block’s solid performance assuaged analysts’ concerns that, in the absence of Covid-19 government stimulus, the momentum in Cash App, Block’s consumer-focused digital wallet, would slow down considerably,” Ark said.

“Block’s management also noted continued strong momentum in January and February, citing 21% growth in Cash App’s gross profit on a year-over-year and 73% [on a] two-year-annualized basis.”

Also last month, Ark assessed DraftKings after its fourth-quarter earnings.

“According to management, if it were to stop investing in states as they open up for mobile sports betting, DraftKings could reach Ebitda profitability by the fourth quarter,” Ark said.

“With a 32% share of the total handle for mobile sports betting in states where it operates today, and a 20% share of gross revenue for iGaming, DraftKings seems likely to find continued success as the legalization of mobile sports betting expands from the 17 states today.”

Further, “DraftKings’ decision to invest aggressively in its media business, NFT marketplace, and social features should increase customer engagement, retention, and monetization,” Ark said.