More Knocks On (Cathie) Wood

Authored by Doug Kass via Seabreeze Partners,

• Cathie Wood’s ARK Invest sold (near a multi-month low) almost 600k Virgin Galactic Holdings yesterday

• SPCE traded at around $60/share in February, 2020 and is trading at approximately $22/share

• What’s going on at ARK?

• Perhaps the financial media should delve below the surface

• Unfortunately, by the time they do… it might be too late for ARKK shareholders

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“I don’t want to lose you
This good thing, that I got
‘Cause if I do, I will surely
Surely lose a lot

‘Cause your love, is better
Than any love I know
It’s like thunder, lightning
The way you love me is frightening
Oh you better knock, knock

On wood, baby..”

– Eddie Floyd, Knock on Wood

Months ago I wrote a column, “We All Live In Cathie Wood’s World (But That Can Change Quickly).”  At the time, ARK Invest was riding high – the beneficiary of enormous fund inflows.

A lot has changed since then, though many (including the financial media) have not taken the time to analyze what.

In Monday’s session, (after recently buying SPCE) ARK Invest sold nearly 600k shares of Virgin Galactic Holdings. 

The shares traded at $60/share in February, and closed yesterday at slightly above $22.

It was less than four weeks ago that ARK Invest’s space exploration fund (ARKX) started trading (the week of March 29th) and initiated a two percent position in SPCE (the shares were trading at about $30/share then). Now it looks to have been sold or is in the process of being sold.

The financial media is asleep in their coverage of ARK Invest. By fawning and emphasizing the past successes of ARK and its ETF vehicles – the media’s flattering attention is seen through the rear view mirror and not based on a bonafide analysis of the risks (particularly the reduced liquidity in concentrated positions)  associated with the ARKK ETF as well as the other ARK Invest vehicles. 

The cynic might say that this is a function of ARK’s marketing and advertising clout (ARK Invest advertises aggressively on all three of the major business networks).  Or the absence of real, critical commentary is a function of professional laziness.

Regardless, most are failing to see the difference between ARKK’s forest and the trees.

I continue to believe that ARKK is a fundamental short.  Here are some of my recent columns that outline my negative view on the shares:

* ARK goes for more Coinbase yesterday  https://realmoney.thestreet.com/dougs-daily-diary?published[value][date]=2021-04-16&author=All#ark-goes-for-mor-20210416

* Knock on Wood  https://realmoney.thestreet.com/dougs-daily-diary?published[value][date]=2021-04-15&author=All#knock-on-wood-20210415

* Look at the technical side of ARKK https://realmoney.thestreet.com/dougs-daily-diary?published[value][date]=2021-03-31&author=All#looking-at-the-t-20210331

* Oh, the ARKK of it! https://realmoney.thestreet.com/dougs-daily-diary?published[value][date]=2021-03-31&author=All#oh-the-ark-of-i-20210331

* The vicious cycle of Wood’s ARK Invest    https://realmoney.thestreet.com/investing/doug-kass-the-vicious-cycle-of-cathie-wood-s-ark-invest-15605967

* Are ARK Invest’s results skill or luck? https://realmoney.thestreet.com/dougs-daily-diary?published[value][date]=2021-03-23&author=All#are-ark-invests-20210323

* Spec tech as in dreck https://realmoney.thestreet.com/dougs-daily-diary?published[value][date]=2021-03-17&author=All#spec-tech-as-in–20210317

* Woulda, shoulda, coulda! https://realmoney.thestreet.com/dougs-daily-diary?published[value][date]=2021-03-08&author=All#wooda-shoulda–20210308

* Good stuff from The Bear Cave Letter on ARKK  https://realmoney.thestreet.com/dougs-daily-diary?published[value][date]=2021-03-04&author=All#good-stuff-from–20210304

* An overloaded ARKK? https://realmoney.thestreet.com/dougs-daily-diary?published[value][date]=2021-02-24&author=All#an-overloaded-ar-20210224

* We all live in Cathie Wood’s world (but that could all change quickly)  https://realmoney.thestreet.com/dougs-daily-diary?published[value][date]=2021-02-12&author=All#we-all-live-in-c-20210212

* Trade of the Week (Short ARKK at $140)  https://realmoney.thestreet.com/dougs-daily-diary?published[value][date]=2021-02-01&author=All#trade-of-the-wee-20210201

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Short ARKK large