Cathie Wood’s ARK Invest bought over $20 million in SpaceX stock on Monday, increasing its stake even as the shares keep falling after the IPO. This follows ARK’s usual approach of buying more during big price drops instead of waiting for a recovery.
ARK Adds to SpaceX at a Discount
SpaceX stock closed at $119.85 on June 20, down 3.34% that day, as ARK spent about $20.45 million across its funds. The shares rose slightly in premarket trading Tuesday, up 1.88% to $122.10.
ARK spread its buying across four funds, each picking up shares at Monday’s closing price:
- ARK Innovation ETF (ARKK): 97,664 shares, ~$11.70 million
- ARK Autonomous Technology & Robotics ETF (ARKQ): 31,807 shares, ~$3.81 million
- ARK Next Generation Internet ETF (ARKW): 28,153 shares, ~$3.37 million
- ARK Space Exploration & Innovation ETF (ARKX): 13,010 shares, ~$1.56 million
These purchases show that ARK sees the current price as a good entry point, even though the stock has struggled since going public.
Stock Slumps 45% as Bears Cash In
SpaceX shares have dropped over 45% since the IPO, wiping out almost $1 trillion in market value in just a few weeks. The stock now trades far below its $135 IPO price, so most early investors are facing losses.
This drop has benefited short sellers. S3 Partners reports that bearish investors have made about $4 billion in paper profits in the past month. Around 30% of SpaceX’s available shares, or about 192 million, are now held in short positions, showing a lot of doubt about the stock’s short-term future.
Two recent events have increased selling pressure. SpaceX’s first Starship launch after the IPO was canceled due to engine problems, which worried investors already concerned about the stock’s ups and downs. Also, a lockup period ends on August 19, releasing 900 million more shares for trading. This extra supply could push the price down further if demand does not keep up.
With lots of short interest, the upcoming end of the lockup period, and ARK still buying, there is a clear divide between investors expecting more declines and those, like Wood, who see this as a chance to buy for the long term. How the stock performs as August approaches may show which group is right.
