ARK Invest Cuts Robinhood Shares, Focuses on Crypto Growth

• ARK sells 1.4M Robinhood shares for $36.4M, nearing its 5% portfolio cap on holdings.
• Robinhood stock hits $25.61 in October, its highest since 2021, after a strong 2024 rise.
• ARK holds $368M in Coinbase, making it the third-largest investment in their portfolio.

ARK Invest, the company managed by Cathie Wood, has offloaded a substantial amount of its stakes in Robinhood (HOOD). On October 8, ARK divested 1.4 million shares of Robinhood with a market value of $36.4 million using three of its main funds. Despite Robinhood’s growth, ARK is shifting its focus, particularly toward crypto-related assets.

This was made in light of Rule 12d3-1, which prevents investment funds from investing more than 5% of their total assets in the securities of a single issuer. ARK closed its positions in Robinhood just before it reached 5% of the portfolio. This is strategic as it shows that ARK’s portfolios have slowly increased the focus on crypto-related investments.

Robinhood’s 2024 Performance

Robinhood’s stock performance in 2024 has been good. The stock closed at $25.61 on October 8, the highest since November 2021. Despite the shares increasing by nearly 30% in the last month, the stock is still noticeably lower than its all-time peak of $44, which was reached shortly after Robinhood’s IPO in July 2021.

The $36.4 million sale was split between three ARK Invest funds. Some of such funds are the ARK Innovation ETF (ARKK), the ARK Next Generation Internet ETF (ARKW), and the ARK Fintech Innovation ETF (ARKF). ARK is cutting back on its exposure to Robinhood, but remains very focused on companies with ties to cryptocurrencies.

ARKK Leads Share Sale

ARKK sold the largest number of shares, 1,094,321, while ARKW and ARKF also sold 191,445 and 135,665 shares, respectively. Even after this sale, ARK has about $274 million worth of Robinhood shares in its portfolio, which makes up around 4.9% of ARKK’s assets.

Even though ARK has reduced its position in Robinhood, it still has a large position in Coinbase. By October 9, ARKK held $368 million of Coinbase stock, the fund’s third-largest investment after Tesla and Roku. Coinbase now accounts for 6.6% of ARKK’s assets, which underpins the fact that ARK continues to allocate most of its resources to crypto assets.

ARK Invest remains one of the biggest proponents of cryptocurrencies and other innovations shaping the future of finance. The firm’s actions, especially on companies like Robinhood and Coinbase, illustrate that fund management is a strategic process in a dynamic market.