“A Dramatic Change In Fortunes” For Cathie Wood: ARKK Is Set For Its Worth Ever Month After Plunging 27% In April

The hits just keep on coming for Cathie Wood. The manager of the ARK Innovation Fund (ARKK) was probably hoping for some type – any type – of help from tech earnings after hours yesterday to buoy the NASDAQ heading into the end of the week.

But, alas, that does not look to be the case. Amazon, and yes even Apple, posted reported that have failed to excite the street heading into the second half of 2022, and the NASDAQ looks slated to have another volatile day on Friday.

Wood’s flagship fund has suffered its worth month on record, plunging nearly 27% in April.

Adding insult to injury this past week were several of Wood’s major holdings. First, Teladoc set the tone, crashing more than 40% after an earnings and guidance meltdown. Then, Tesla shares were under pressure all week (from what we now know to have been Elon Musk selling billions of dollars in stock). 

The shares were sold over the past few days, at prices ranging from $872.02 to $999.13, and were the first by the Tesla chief since a burst of selling late last year that raised more than $16bn (which were offsetting tax payments on vesting options).

And on Thursday after hours, Robinhood, another popular ARK name, was also down 10% on earnings. 

ARKK has now fallen almost 70% from its all time highs, Bloomberg noted in a wrap up Friday morning. They called it a “dramatic change in fortunes for Wood”.

The report noted that out of the fund’s 37 holdings, only one – Signify Health – is green for the year. 

Russ Mould, investment director at AJ Bell, told Bloomberg: “The debate about whether Cathie Wood just rides beta up and beta down, or is genuinely capable of providing alpha, will continue to rage.”

But is there really a debate? Rather, it seems to us to be an amazing case study in what happens when the Fed suddenly decides it no longer wants to artificially prop up the stock market.