Popular investment firm ARK Invest has made a substantial investment in the commission-free investing app Robinhood, acquiring 1,141,046 units of Robinhood shares within a 24-hour period. The investment, valued at $9.5 million, was distributed across ARK Invest’s three innovation exchange-traded funds (ETFs): ARK Innovation ETF (ARKK), ARK Next Generation Internet ETF (ARKW), and ARK Fintech Innovation ETF (ARKF).
ARKK Acquires Majority Holdings
Among the innovation portfolios, ARK Innovation ETF (ARKK) obtained the majority of Robinhood shares, securing 888,500 units, which accounted for 78% of the total stock acquisition. ARK Next Generation Internet ETF (ARKW) acquired the second-highest amount with 152,849 shares, while ARK Fintech Innovation ETF (ARKF) received 99,697 shares.
ARK Invest, led by pro-crypto advocate and investor Cathie Wood, has been closely monitoring the Robinhood platform. Prior to this recent investment, ARK Invest purchased 197,285 Robinhood shares through its ARK Next Generation Internet ETF (ARKW) on October 23. Additionally, the firm acquired 259,628 shares in the retail-friendly investment platform. These investments align with Wood’s growing portfolio within the Robinhood platform.
However, the investment came amidst a 15% decline in Robinhood’s shares, which dropped to $8.39 at the time of writing. The platform has experienced a significant decrease in its customer base, with a 16% year-over-year decrease in monthly active users in the third quarter of 2023. Furthermore, Robinhood’s revenue saw a 13% decline in third-quarter transaction revenue in its stocks division, and a 55% drop in crypto trading.
ARK Invest’s Shifting Investments
While increasing its stakes in Robinhood, ARK Invest has also reduced its investments in other assets. Notably, the firm sold off a significant portion of Grayscale’s GBTC fund, liquidating 48,477 shares worth $1.4 million on November 8. Prior to this, it had also sold 139,506 GBTC shares, valued at approximately $4 million, on November 6.
These moves have sparked curiosity among observers, as ARK Invest is positioning itself for the launch of its in-house cryptocurrency-based products. The firm recently announced its partnership with exchange-traded product (ETP) provider 21Shares to introduce a Digital Asset ETF Suite. The new suite will consist of five ETF products and is set to launch on November 16, listed on the Chicago Board Options Exchange (CBOE) and targeting high-net-worth investors.
