Ark Invest Acquires More Coinbase Shares

Ark Invest bought another 19,892 Coinbase shares worth $3.9 million across three of its exchange-traded funds on Tuesday, continuing to rebalance fund weightings after Monday’s market plunge.

The Cathie Wood-led investment firm purchased:
– 13,833 shares ($2.7 million) for its Innovation ETF (ARKK)
– 2,743 shares ($533,000) for its Next Generation Internet ETF (ARKW)
– 3,316 shares ($644,000) for its Fintech Innovation ETF (ARKF)

These acquisitions follow the $17.8 million worth of Coinbase shares Ark bought for the same funds on Monday. Notably, this is the first time Ark has bought back Coinbase stock since a $21 million purchase in June 2023. Following a rise of over 250% in Coinbase’s stock, Ark had been offloading COIN numerous times during the period.

Ark maintains a strategy where no individual holding exceeds 10% of an ETF’s portfolio, ensuring diversification. This means Ark may continue to rebalance its COIN holdings as the stock price fluctuates relative to the funds’ other assets.

As of August 6, COIN has become the third-largest holding in the ARKK ETF with a weighting of 8.7% (worth $445.3 million) and the fourth-largest in ARKW at 6.8% (worth $84.4 million). In the ARKF fund, Coinbase shares represent the largest holding at 9.8% (worth $75.1 million).

Coinbase Shares Recover After Initial Drop

Coinbase shares gained 2.5% on Tuesday, reaching $194.17 by market close, recovering from an initial 15% drop on Monday amid market volatility due to U.S. recession fears and geopolitical tensions. Although up 123% over the last year, the stock remains 5% down this week and 43% below its all-time high of $342.98, reached in November 2021.

As of August 6, Coinbase’s valuation stands at $36.1 billion according to The Block’s data dashboard.

Ark Invest’s Activity with Robinhood and Block

Ark also purchased 121,979 shares of Robinhood for $2.1 million, while the stock rose 4.8%. This followed an $11.2 million purchase made on Monday. Robinhood is set to announce its Q2 financial results after market close on Wednesday.

Conversely, Ark offloaded shares in Jack Dorsey’s Block, selling 286,425 shares (worth $16.4 million) on Tuesday after a previous sale of $26 million worth of Block shares on Monday, as the stock traded flat.