Why Ark Invest buy and sell Tesla shares for the past 2 weeks?

1) In the past 2 weeks (between 12 Dec to 23 Dec), Ark Invest bought 96.41K and sold 266.43K Tesla's shares and maintained the stake at around $1.48B (3.43M shares).
Using the Moomoo app, you can check how much Tesla's share Cathie Wood is holding by using Institutional Tracker:
Menu>Market>Select US stock>scroll down to select Ark Investment Management LLC
You should see Tesla stock as the first few on the list showing the number of share holding, share value etc. Click the stock and you can see Cathie Wood's trading details.

2) Yahoo Finance

According to Yahoo Finance, Ark Invest has been trimming its stake in Tesla. For example, selling 14,016 shares at $6.17 million, ARKK dropped its stake in Tesla. Reflecting an attempt to control concentration concerns after the major stock increase, the sell follows a larger trend of reducing Tesla exposure. Even with the cuts, Tesla is among ARK's biggest assets.

3) My Take

There are 3 negative comments I received about Ark Invest (and Cathie Wood) frequently. Here is my view:

#1: "Cathie Wood would sell (buy) when Tesla share price is up (down)."

Ark Invest buys and sells Tesla's share frequently. This is because when the stock price is up (down),  she wants to reduce (increase) its stake to prevent overexposure. This is known as portfolio adjustment.

#2:  "Cathie Wood is taking profit (or panic selling) when Tesla stock is up (down)."
It is not taking profit (or panic selling) and because the amount of Tesla's share she  sold is small compared to what she held. It is called portfolio adjustment. Cathie Wood is super bullish on Tesla stock and declares a target price of USD 2,000 (expected value) by year 2027.

#3: "Ark Invest is the worst investment fund"

People who posted such remark were referring to a time when the fund loses value during a bearish stock market environment (between 2022 to 2023). As Ark Invest holds stocks of companies with disruptive innovation, such stocks performed badly under a bear market condition.

According to Yahoo Finance, the fund performance gained much in 2024 especially during H2 +29.39% in the last 3 months. The stock price is 10.65% YTD. But for the past 3 years, the return was near -18%. You can imagine how frustrating it would be when someone bought the fund in late 2021 and is still making a loss till now.

Visual Capitalist visualized the 12 worst investment funds over the past decade, as of Dec. 31, 2023. This ranking was compiled by Morningstar, and is based on the amount of shareholder wealth lost. ARK Innovation ETF and ARK Genomic Revolution ETF are in the list.

Personally I see investing in stocks of companies with disruptive innovation as long term and very risky. It is difficult to justify the fair value of the ETF by fundamentals. If you want to invest in Ark Invest, you must dive deeply into the philosophy of disruptive innovation.

As for Tesla, Cathie Wood is very accurate in predicting the share price despite giving bold target prices. She also received much criticism when the stock plunged to a low in 2023 and early 2024. Many doubted her strong support for Tesla robotaxi but the sentiment has changed recently. It really depends on what you want to believe.

Source: