In a notable shift in its investment strategy, Ark Invest has sold a portion of its holdings in cryptocurrency exchange Coinbase (NASDAQ:COIN), while simultaneously increasing its stake in financial services company Robinhood (NASDAQ:HOOD). This move reflects a shift in the fund's approach to managing its crypto-related portfolio in a market that is experiencing significant regulatory changes.
On Monday, Ark Invest sold approximately $5.3 million worth of Coinbase stock, totaling 43,956 shares. The sale comes as Coinbase's stock hit a peak of $121.67, a level it hasn't seen in over a year. Despite this high, the fund has been gradually reducing its position in Coinbase throughout the year, including a substantial $103 million sale back in July, and has also trimmed its investment in the Grayscale Bitcoin Trust by selling around $3 million in shares.
Ark Invest's decision to lighten its Coinbase holdings is part of a broader strategy that has seen the fund pivot towards other fintech companies such as SoFi (NASDAQ:SOFI), while navigating an evolving cryptocurrency market landscape. The fund's management appears to be responding to the increasing regulatory scrutiny faced by industry players, including Binance, by diversifying its portfolio.
In contrast to its divestment from Coinbase, Ark has been bolstering its position in Robinhood. The investment has been channeled through the Ark Fintech Innovation ETF and ARK Next Generation Internet fund. This decision comes even as Robinhood's stock has not demonstrated strong growth this year and has seen recent declines. Nevertheless, Ark Invest recognizes potential in Robinhood's expansion plans into the European Union and the United Kingdom markets and has chosen to invest with an eye on future opportunities.
InvestingPro Insights
In light of Ark Invest's recent portfolio adjustments, a closer look at real-time data and insights from InvestingPro may provide additional context for investors. For Coinbase (COIN), three analysts have revised their earnings upwards for the upcoming period, indicating a potential positive shift in future performance. However, the stock is currently in overbought territory according to the RSI, suggesting that caution may be warranted despite its significant return over the last week. For more insights, investors can refer to the 12 additional InvestingPro Tips available for Coinbase at InvestingPro.
Turning to Robinhood (HOOD), management's aggressive share buybacks and accelerating revenue growth are notable. Analysts are also expecting net income growth this year, which contrasts with the two analysts who have revised their earnings downwards for the upcoming period. Robinhood does not pay dividends to shareholders, which might influence investors looking for income-generating stocks. Additional insights can be found in the 10 InvestingPro Tips for Robinhood, available with a subscription.
InvestingPro Data for Coinbase indicates a market cap of $30.65 billion and a negative P/E ratio, reflecting the company's current lack of profitability. However, the stock has experienced a 1-week total return of 13.54%, and a 1-month total return of 69.21%, demonstrating recent strong performance.
For Robinhood, the market cap stands at $7.4 billion, with a similar negative P/E ratio. The company has seen a revenue growth of 32.29% over the last twelve months as of Q3 2023, which may interest investors focused on growth metrics.
Investors can take advantage of the special Cyber Monday sale for an InvestingPro subscription, now with a discount of up to 55%. Additionally, using the coupon code sfy23 will provide an extra 10% off a 2-year InvestingPro+ subscription. This offer is an excellent opportunity for investors to access a wealth of professional insights and metrics to guide their investment decisions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.