Ark Invest sold 85K Tesla shares after earnings is Portfolio adjustment, NOT about taking profit
1) One of Tesla’s biggest bulls ARK Invest, led by Cathie Wood sold over 85,000 shares across two of its ETFs on Thursday, following the biggest day for the automaker in a decade on Wall Street, but it is not because it wants to take a profit.
2) There are 2 usual comments made by Tesla haters ( in short TH) to mislead retail investors:
Myth 1: Tesla share price surge is due to institutes pumping. The Tesla bull Ark Invest sold the share showing that it is taking profit and has no confidence in the company.
Fact: TH will not tell you Ark Invest is still holding 4.26M shares worth $1.11T (24 October 2024). The amount sold is small (peanut) compared to the amount Ark Invest is holding hence the selling (and buying) is just portfolio adjustment. You can easily check the trading history by using the Moomoo app. Go to Menu>Market>US and click on Ark Invest Management LLC.
Myth 2: Tesla share price will go opposite with how Ark Invest trades the stock. When Cathie Wood buys, the share price will go down.
Fact: TH is misleading you by reversing the cause and effect. Ark Invest buys the share because the price dip. Anyone with basic knowledge will know the meaning of buying low to accumulate the share.
This article explained why is Ark Invest selling the stock after the earnings when the share price soared 22%:
... ARK would not take profits on Tesla now, considering its thesis for the stock, which is valued at $2,600 per share in 2029. This includes a $1,500 bear case and a $7,000 bull case.
... If it was strictly about profitability, ARK would not sell any shares of Tesla and would only buy. However, it cannot let its ETFs be dominated and overly concentrated by Tesla shares, so it occasionally sells after it begins to make up too much of these funds.
... Inversely, when Tesla stock is down, ARK loads up. After Tesla’s Q2 earnings call when the stock was trading at around $182 with an over 12 percent slide, ARK loaded up on about $5 million in shares.
3) In short, the above is known as portfolio adjustment which is a common practice in fund management. You may also want to read the following related articles:
1. Ark Invest bought nearly $3M Tesla shares after Robotaxi event
2. Why Cathie Wood continues to buy Tesla shares at dip
1. Ark Invest bought nearly $3M Tesla shares after Robotaxi event
2. Why Cathie Wood continues to buy Tesla shares at dip
Source:
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I reflected trading experiences by writing journals. My comments are for educational purposes not financial advice.
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ZhukovHatesPepsi : you gonna ban anyone who offers an opposing viewpoint to you again?
ZnWC OP ZhukovHatesPepsi : If I ban opposing view, you'll be blocked and unable to read and comment this post. Because you frequently offer negative biased view about Tesla. If you continue to slam my post, I'll will report you to Moomoo again.
ZhukovHatesPepsi ZnWC OP : literally have never spoken about Tesla, except to ask people's opinions, so I definitely don't have a biased view.
you say you didn't ban me but reporting me didn't give me a chance to respond to your reply last time about me. So your opinions cannot be checked? who's the biased one now.
also if you actually bothered to understand my viewpoint you wouldn't have just jumped to the conclusion that I hate Tesla. My point was about ARK invest's investment belief not always matching up with their trades. They talk about long term investments I'm disruptive tech but they sold NVDA early, bought Tesla at its peak and had to sell some at a loss. ARK has to answer to their investors so fund managers like that usually can't hold a loss making trade for too long.
Also their valuation for Tesla is just bonkers. Tesla's PE right now is 70, at 260 dollar valuation. I do think Tesla is a good company and they can definitely grow in the future but to reach a valuation of 2000 before 2030? that's purely speculative trading and not investing. Tesla right now is struggling to meet the demand of its buyers, cyber trucks are still slow to roll out. They are receiving very little help as an EV maker from the government due to Elon Musk being disliked by a lot of politicians. But there is a demand for Tesla and I don't see it going away. Their biggest issue is supply at sustaining their growth. Elon is moving his factories to states with more favourable laws, especially after the incident where that judge blocked his contractual bonus from being paid. His biggest issue he faces is expanding his business without letting costs spiral. So Tesla is undergoing a transformation and will take a while before it reaches its full potential.
ZhukovHatesPepsi ZnWC OP : Tesla has only become profitable in the last 5 years so its valuation right now of 70 PE would mean it would need to almost double its EPS to fall into average PE of around 30x of the S&P 500, so 260 right now is the market already pricing in and expecting a doubling in growth. A valuation of 2000 would mean Telsa would have to double its growth, 3 whole more times.
Which I'm gonna be honest that kind of growth in the next 6 years, with Tesla right now backed up on orders already. Its a lot of wishful thinking, which is why I don't like ARKs thinking.
this does not mean I don't like Tesla. I think Tesla can grow and its a good company, I think people who want to buy Tesla must either see it as a long term investment or if they want to make short quick profit they best wait for dips and buy into
ZnWC OP ZhukovHatesPepsi : Why suddenly you become so "neutral" about Tesla and Elon Musk? Don't be so defensive (and sensitive) unless you are like someone who posts negatively biased about the stock daily.
ZnWC OP ZhukovHatesPepsi : I always tell my readers to ask for sources of information and verify them with another platform. What you have said are the usual stuff posted by the legacy media (and shared by Tesla bears and haters). I have rebuked most of them in my previous posts and will not repeat here. All can read and compare. Here are 2 examples:
1. Tesla stock looks cheap if you compare PEG ratio
2. Ark Invest sold 85K Tesla shares after earnings is Portfolio adjustment, NOT about taking profit
If you really care about giving a balanced view, always state your sources of information for everyone to compare and contrast.