ARK Invest Dumps Robinhood, Bets Big on Roblox and Coinbase

ARK Invest, led by Cathie Wood, has unloaded significant amounts of Robinhood shares, including 1.6 million worth $31.5 million from ARKK, 275,933 from ARKW, and 128,137 from ARKF. This sale marks the largest disposal of HOOD stock by ARK since it began accumulating it last year. Despite the sale, Robinhood remains ARKK's eighth-largest holding, representing 4.3% of its $8.2 billion assets under management.

ARK Invest's Drastic Realignment: Dumping Robinhood While Accumulating Roblox and Coinbase

In a significant portfolio shift, ARK Invest, the renowned investment management firm spearheaded by the esteemed Cathie Wood, has divested a substantial portion of its holdings in Robinhood Markets, Inc. (HOOD), a leading cryptocurrency-friendly brokerage platform. The move has raised eyebrows within the financial community, particularly given ARK's previous bullish stance on Robinhood.

On March 25, ARK unloaded 1.6 million Robinhood shares from its various funds, a transaction worth approximately $31.5 million based on HOOD's closing price of $19.08 on Monday. Notably, the bulk of the sale, representing 1,247,181 shares worth around $24 million, originated from the ARK Innovation ETF (ARKK). ARK also divested additional HOOD shares from its ARK Next Generation Internet ETF (ARKW) and ARK Fintech Innovation ETF (ARKF), amounting to 275,933 and 128,137 shares, respectively.

This latest Robinhood selloff marks the most significant reduction in ARK's holdings of the company since it began actively accumulating HOOD stock less than a year ago. The sales coincide with a period of substantial growth for Robinhood, with its share price surging by 36% over the past 30 days.

ARK's Robinhood divestiture is attributed to its compliance with Rule 12d3-1, which prohibits investment funds from acquiring more than 5% of the outstanding shares of any given company. However, despite the sale, ARK's ARKK fund still holds HOOD as its eighth-largest portfolio asset, accounting for approximately 4.3% of its total $8.2 billion in assets under management.

While shedding Robinhood, ARK has simultaneously increased its exposure to the online gaming platform Roblox Corporation (RBLX). On March 25, ARK purchased 740,115 Roblox shares for its various funds, including ARKK, ARKW, and ARKF. The transaction is valued at approximately $27 million based on Monday's closing price.

In addition to shedding Robinhood, ARK has also continued to reduce its holdings in Coinbase Global, Inc. (COIN), the leading cryptocurrency exchange. On Monday, ARK sold 4,291 COIN shares, a transaction worth roughly $21 million as of Tuesday morning.

Robinhood's appeal as a crypto-friendly trading platform has been a key factor in its popularity among retail investors. The platform allows users to trade a wide range of cryptocurrencies, including Bitcoin (BTC) and Ethereum (ETH), alongside stocks, ETFs, options, and other financial instruments.

On March 20, 2023, Robinhood launched the Android version of its self-custodial wallet, the Robinhood Wallet app. The move was seen as a significant step toward empowering users with greater control over their digital assets.

Despite Robinhood's recent successes, ARK Invest's decision to significantly reduce its exposure to the company highlights the dynamic and evolving nature of the investment landscape. The firm's rebalancing of its portfolio suggests a shift in its outlook on the relative attractiveness of Robinhood and other opportunities in the technology sector.

As ARK Invest continues to navigate the rapidly changing market environment, its portfolio adjustments will undoubtedly be closely scrutinized by investors eager to gain insights into the firm's investment strategy and its implications for the broader market.