Why Is Cathie Wood Dumping Coinbase Stock?
It’s been a phenomenal comeback year for $Coinbase(COIN.US$ , as shares of the cryptocurrency exchange platform are up by more than 300%. Much of the gains have come in the second half of the year in stride with the price incline of Bitcoin.
Cathie Wood and Ark Invest have certainly taken notice. As of Dec. 1, Ark Invest’s combined funds owned 9.48 million shares of COIN stock. That number has since declined to 8.66 million shares. Ark’s stake in Coinbase peaked on June 7 when it owned 11.43 million shares.
Last Friday, Ark sold off 335,860 shares of Coinbase, the largest sale of the company since last July. Last week, her sales of Coinbase were worth over $100 million.
Still, shareholders shouldn’t view Wood’s sales as her giving up on the company. Coinbase is still the largest position in the $ARK Innovation ETF(ARKK.US$ , $ARK Fintech Innovation ETF(ARKF.US$ and the $ARK Next Generation Internet ETF(ARKW.US$ Among all Ark ETFs, Coinbase is the largest holding as well with a 8.79% weight.
Still, shareholders shouldn’t view Wood’s sales as her giving up on the company. Coinbase is still the largest position in the $ARK Innovation ETF(ARKK.US$ , $ARK Fintech Innovation ETF(ARKF.US$ and the $ARK Next Generation Internet ETF(ARKW.US$ Among all Ark ETFs, Coinbase is the largest holding as well with a 8.79% weight.
Ark must take into account risk when deciding on investments and that includes portfolio concentration and diversification.
“The median security position size is generally around 2% while the maximum position size to which a security can be purchased is typically 10%. The typical minimum weight is 1%, although a position may go lower,” writes Ark.
Coinbase currently has an 11.1% weight in ARKK, a 13.29% weight in ARKF and an 11.89% weight in ARKG. Unless the price of COIN declines, investors should expect further sales of the stock within Ark’s ETFs to around a 10% weight based on the above statement. Along with the maximum position size of 10%, Ark is also likely taking gains on a year of outperformance.
“The median security position size is generally around 2% while the maximum position size to which a security can be purchased is typically 10%. The typical minimum weight is 1%, although a position may go lower,” writes Ark.
Coinbase currently has an 11.1% weight in ARKK, a 13.29% weight in ARKF and an 11.89% weight in ARKG. Unless the price of COIN declines, investors should expect further sales of the stock within Ark’s ETFs to around a 10% weight based on the above statement. Along with the maximum position size of 10%, Ark is also likely taking gains on a year of outperformance.
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