Crypto News- Ark Invest recently made significant moves in its investment portfolio by offloading a considerable number of Coinbase shares, totaling 25,662 across two of its exchange-traded funds. This action, as disclosed in the company’s latest trade filing, saw the investment firm divest 22,690 shares ($5.7 million) from its Innovation ETF (ARKK) and 2,972 shares ($742,000) from its Next Generation Internet ETF (ARKW).
Ark Invest’s Latest Move: Shedding 6.4 Million Dollars in Coinbase Shares
This divestment of $6.4 million worth of COIN shares marks Ark’s first major sale of Coinbase stock since it offloaded $21 million worth on March 26. Cathie Wood, the CEO of Ark Invest, clarified during a recent Q&A session on Reddit that this move wasn’t a “dumping” of assets but rather a strategic adjustment reflecting the essence of active management.
Wood explained that Coinbase had significantly appreciated, nearly ninefold since the spring of 2023, becoming more than 10% of the portfolio. As per Ark’s investment strategy, no individual holding should exceed 10% of an ETF’s portfolio to maintain diversification. Thus, the firm is rebalancing its fund weightings by taking profits from Coinbase and reinvesting them into other promising stocks, particularly those in sectors like life sciences and companies like Tesla, which have faced short-term setbacks.
Despite the divestment, Coinbase remains a significant player in Ark’s investment portfolio. It holds the position of the largest holding within its ARKK ETF, with a weighting of 9.9%, and the second-largest holding in its ARKW fund, with a weighting of 10.1%.
Coinbase’s Impact on ARKK and ARKW Funds: Impressive Performance Amidst Market Volatility
Coinbase’s market value within ARKK stands at $708.1 million, while within ARKW, it’s valued at $168.8 million at current prices. The ARKK and ARKW funds have shown impressive performance over the past year, with gains of 29.4% and 58.2%, respectively.
In parallel with Ark’s actions, Oppenheimer, a New York-based investment bank, recently raised its price target for Coinbase shares to $276, citing the continued adoption of digital assets and estimating significant growth in trading volume for the first quarter of 2024. This target represents a 10.5% increase over Coinbase’s recent closing share price of $249.61. Despite a slight decline in trading, Coinbase has shown remarkable performance, up 8.5% over the past month and 44.3% year-to-date.
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