Tesla Plunges While Ark Investment Boosts Stake Amidst Bearish Analyst Outlook

Amidst Tesla's extended decline, Cathie Wood's Ark Investment Management has significantly increased its acquisition of Tesla shares and bolstered its holdings in crypto-related exchange-traded funds (ETFs). Ark purchased approximately $13.3 million worth of Tesla shares and augmented its positions in ETFs with crypto exposure, including Ethereum futures and spot Bitcoin.

Tesla Drops, Ark Investment Bolsters Stake Amidst Bearish Analysts' Sentiment

Despite Tesla, Inc. (TSLA) extending its losing streak to five consecutive sessions, breaching a key psychological threshold, Cathie Wood's Ark Investment Management remains bullish, aggressively acquiring Tesla shares and bolstering its holdings in crypto-related exchange-traded funds (ETFs).

Tesla Buyout Spree

Across its three flagship ETFs, the ARK Innovation ETF (ARKK), ARK Autonomous Technology & Robotics ETF (ARKQ), and ARK Next Generation Internet ETF (ARKW), Ark purchased a staggering 88,720 Tesla shares on Thursday, valued at approximately $13.30 million based on Tesla's closing price of $149.93.

This surge in buying activity marks the third consecutive day of Tesla share accumulation by Ark, bringing the total invested in the EV giant this week to an impressive $26.89 million.

Analysts' Gloom Meets Ark's Optimism

Ark's bullish stance comes amidst a week of downward pressure on Tesla, with analysts revising their estimates and price targets in anticipation of a potential earnings miss next week. Concerns about recent layoffs, plans for shareholder approval of CEO Elon Musk's compensation package, and uncertainties surrounding the sub-$30,000 electric vehicle have contributed to the stock's weakness.

On Thursday, Tesla closed at its lowest level since January 25, 2023, prompting Ark to scoop up shares at a perceived bargain.

Crypto Exposure Expansion

While Ark has been gradually reducing its exposure to crypto-related stocks like Coinbase Global, Inc. (COIN) and Robinhood Markets, Inc. (HOOD), it refrained from trading these shares on Thursday. Instead, Ark actively increased its positions in ETFs with crypto exposure.

ARKW acquired 22,461 units of ARK 21Shares Active Ethereum Futures Strategy ETF (ARKZ) valued at $823,645. Ark's ARK Fintech Innovation ETF (ARKF) purchased 490,751 units of its recently launched spot Bitcoin (BTC/USD) ETF, the ARK 21Shares Bitcoin ETF (ARKB) valued at $31.19 million.

ARKW also added 42,800 Proshares Ether Strategy ETF (EETH) valued at $2.90 million.

ARKB, which commenced trading on Jan. 11, 2024, has surged by approximately 36%, riding the wave of Bitcoin's rally, which has gained about 34% since its inception.

ARKZ, an actively managed ETF launched by Ark, seeks 100% exposure to Ethereum (ETH/USD) by investing in ether futures contracts. The fund, with approximately $11 million in net assets, has yielded an impressive 24% year-to-date.

Bitcoin on the Rise

Bitcoin has strengthened amidst escalating geopolitical tensions in the Middle East. At the time of writing, the world's largest cryptocurrency had climbed by 0.72% over the past 24 hours, reaching $62,141.40, according to Benzinga Pro data.

Ark's Undeterred Optimism

ARKK closed down 0.26% on Thursday, settling at $42.91. Despite the overall market sentiment and analysts' bearish predictions, Ark Investment Management remains steadfast in its belief in Tesla and the broader crypto sector. Wood's continued accumulation of shares in these areas signals her unwavering conviction in their long-term growth potential.