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ARK’s Cathie Wood: ‘Private markets get it,’ but disruptive tech is beaten-up in the stock market

ARK's Cathie Wood: ‘Private markets get it,’ but disruptive tech is beaten-up in the stock market

When it comes to evaluating disruptive innovation, private markets seem to understand opportunity better than the stock market, according to Cathy Wood, founder and CEO of ARK Investment Management.

“Private markets understand it,” Wood said Tuesday, while on stage at the Exchange ETF conference in Miami, referring to the company’s valuations seen in its venture capital deals. But ARK’s stock-market bets on disruptive innovation have faltered this year, even as Wood asserts that fundamentals, for the most part, “have not deteriorated.”

“During the no-risk periods, we always focus on our portfolios,” she said, preferring the “highest condemnation names” identified by ARK. She said some of the “unification” candidates that emerged were “lying” while other bets were “crushed”.

ARK Innovation ETF shares ARKK,
+ 3.07%
Tuesday closed flat and is down about 37% so far this year, according to FactSet data. The data showed that the exchange-traded fund was bruised last week, dropping nearly 10%.

be seen: Cathie Wood’s ARK Innovation ETF slips into a stock market sell-off on Wednesday

While on stage at the conference, Wood was asked how often she spoke to Elon Musk, CEO of Tesla Inc. TSLA,
+ 2.10%And
In addition to his relationship with Twitter, the social media company in which he recently acquired a stake to become its largest single shareholder.

Read: Twitter CEO says Elon Musk will not join its board

“I think people will be surprised how little Elon and I talk,” Wood said. She said ARK, which owns Tesla shares, is interested in the company’s technologies, including artificial intelligence strategy, robotics and battery technology, as well as Musk’s “vision.”

For Twitter TWTR,
+ 2.64%And
where musk With over 81 million followers, Wood said “for Elon, all publicity is good publicity.” She said Tesla spends “zero” on advertising.

According to Wood, ARK supports “radical transparency” in the financial services industry. “We are giving up our research,” she said. “We share our thoughts.”

Wood also said “we’ll publish our models” on GitHub. She said investors would be able to alter variables in the models “if you think we’re too aggressive or not aggressive enough.”

Plus, ARK reveals its holdings every day, Wood said. She said ARK’s transparency can help increase shareholder conviction of an asset manager’s investment strategy, while some investors may use the information for their personal investment portfolios.

“Innovation is happening at an accelerated rate,” Wood said. Tesla and Bitcoin BTCUSD,
+ 3.96%
Alone changed people’s lives.”

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