Cathie Wood's Recent Portfolio Moves

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【Summary】Cathie Wood, CEO of Ark Invest, has sold shares of Tesla and Shopify from the firm's ETFs while buying shares of Archer Aviation. Despite the sales, Wood still has confidence in Tesla and Shopify, as they remain significant holdings in the company's portfolios. Wood has invested around $16 million in Archer Aviation, a maker of flying electric vehicles, indicating her excitement for the company's potential.

FutureCar Staff Aug 20, 2023 6:14 AM PT

Ark Invest CEO Cathie Wood has been reducing her holdings in Tesla and Shopify from the investment firm's exchange-traded funds (ETFs). On August 15, Ark Invest sold 1,884 shares of Tesla stock, followed by the sale of 182,314 shares of Shopify stock the next day.

Interestingly, the funds from these sales are being used to invest in Archer Aviation, a high-risk growth stock with great potential. On August 16, Wood's company purchased approximately $16 million worth of Archer Aviation shares for its Ark Innovation ETF.

Despite the recent stock moves, Wood remains bullish on both Tesla and Shopify. Tesla is still the largest holding in Ark Innovation ETF, accounting for 10.1% of the total portfolio weight. Similarly, Shopify represents approximately 9.6% of the total portfolio weight in the Ark Fintech Innovation ETF.

Ark's sales of Tesla and Shopify were relatively small compared to its overall holdings, with Tesla sales amounting to approximately $439,000 and a $8.9 million reduction in the Shopify position. These moves were likely made to free up funds for other potential high-growth opportunities, such as Archer Aviation.

Archer Aviation, a maker of flying electric vehicles, went public in 2021 through a merger with a special purpose acquisition company. Wood sees Archer as a long-term winner and has made previous investments in the company. Archer recently secured $215 million in new investment funding, bringing its total funding to over $1.1 billion.

The urban air-mobility market is projected to be worth $29 billion annually in 2023 and over $1 trillion by 2040, according to estimates from Morgan Stanley. Archer aims to achieve FAA certification and begin commercial operations in 2025. The company's Midnight vehicle has already received the FAA special airworthiness certificate.

Despite the promise of Archer Aviation, investors should note that its outlook is highly speculative. Wood's investment in Archer represents a relatively small portion of Ark's flagship growth fund, with Archer stock currently accounting for approximately 0.4% of the Ark Innovation ETF.