Cathie Wood's investment firm, Ark Invest, purchased shares of SpaceX through several of its exchange-traded funds on Wednesday. The funds involved were the ARK Innovation ETF (ARKK), the ARK Autonomous Technology & Robotics ETF (BARKQ), the ARK Next Generation Internet ETF (ARKW), and the ARK Space Exploration & Innovation ETF (ARKX).
The total transaction amounted to 121,384 shares. Based on SpaceX's closing price of $115.26 that day, the investment was valued at approximately $14 million.
A 25-year study by First Trust highlights a common challenge for new public companies, showing that most U.S. stock market IPOs underperform over the long term. The research indicates 59% of companies post negative returns within two years of listing, with the median return declining by 10.5%. For SpaceX, this study underscores the difficulty of converting strong initial market enthusiasm into sustained financial performance. Despite the company's growth drivers like Starlink and its launch services, investors are focused on whether its execution can justify its premium valuation over time.
Concurrently, SpaceX CEO Elon Musk has warned investors holding significant short positions against the stock, stating their probability of long-term success is "extremely low." This comment gained widespread media attention following a period where short interest had increased as the stock declined from its post-IPO highs.
These remarks echo Musk's long-standing criticism of short-sellers during his tenure at Tesla, where he frequently predicted bearish investors would face losses. On Tuesday, SpaceX's share price rose over 6%, recovering from a recent slide to post-listing lows.
Despite SpaceX's significant drop from its post-debut peak, Wood has reiterated her bullish stance on the company. She has described it as having the potential to become "the most important company in the history of the world," emphasizing the long-term prospects demonstrated by its Starlink initiative. Wood's funds have been actively accumulating SpaceX shares recently, including a purchase worth $20.5 million just this past Monday.
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