Cathie Wood’s ARK Invest Reshuffles Portfolio: Trims Coinbase, Buys Reddit
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Cathie Wood’s ARK Invest Reshuffles Portfolio: Trims Coinbase, Buys Reddit

ARK Invest, led by Cathie Wood, recently made notable transactions involving Coinbase and Reddit.
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Cathie Wood’s ARK Invest recently made two significant transactions involving Coinbase (NASDAQ: COIN) and Reddit (NYSE: RDDT) shares. The firm, known for its focus on disruptive innovation, sold some of its Coinbase holdings for a profit while simultaneously investing in Reddit’s highly anticipated IPO.

Cathie Wood’s ARK Invest Books Profit on Coinbase, Buys Reddit

ARK Invest, the investment management firm led by Cathie Wood, recently made significant transactions involving Coinbase and Reddit shares. On March 21, ARK sold 199,526 Coinbase shares across three of its ETFs, with the majority (133,533) coming from the ARK Innovation ETF (ARKK).

The sale, including shares from the ARK Next Generation Internet ETF (ARKW) and ARK Fintech Innovation ETF (ARKF), amounted to approximately $52.35 million based on Coinbases’ closing price that day. The transaction occurred as Coinbase’s stock price surged above $270, reaching its highest level since December 2021, and is part of a series of significant sales of Coinbase shares by ARK in 2023 and early 2024.

In contrast to the Coinbase sale, ARK Invest acquired nearly 10,000 shares of Reddit on the occasion of the social media platform’s strong market debut.

The firm added 9,982 shares to its ARK Next Generation Internet ETF and ARK Fintech Innovation ETF, with the transaction value amounting to approximately $503,492 based on Reddit’s closing price on the day of the purchase. The acquisition of Reddit shares demonstrates ARK’s interest in the potential growth and innovation of the social media platform as it enters the public market.

Reddit IPO a Success, Closed at $50.44

Reddit’s shares surged 48% on their first day of trading in New York, closing at $50.44 per share after opening at $47. This exceeded the initial pricing of $34 per share set for the IPO.

The company was valued at $6.4 billion post-IPO, raising $748 million through the sale of shares, which decreased from a $10 billion valuation in a private fundraising round in 2021.

Despite not reporting an annual profit since its inception in 2005, Reddit has generated interest by positioning its content as valuable for training artificial intelligence (AI) programs. This includes a reported data licensing deal with Google worth approximately $60 million annually.

The company’s IPO was highly anticipated, having confidentially filed in December 2021, but market conditions delayed the public offering until 2024.

Reddit allocated 8% of its shares to eligible users, moderators, certain board members, and friends and family members of employees and directors. Retail investors were given early access to some shares through various platforms, introducing risks associated with increased price volatility due to the lack of a lock-up period for these investors.

The company’s cultural significance and the “meme-stock” phenomenon of 2021, in which its subreddit “Wallstreetbets” played a key role, contributed to its high profile leading up to the IPO. Its post-IPO performance will be closely monitored to determine its future direction and financial health indicators.

Do you think Reddit has a good long-term potential, or will it be a meme stock? Let us know in the comments below.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.