It’s been a rocky year for Catherine Wood’s Ark fund. In March, a Yahoo finance story ran with the headline ‘Why Cathie Wood’s once hot Ark Innovation ETF has lost all its 2021 gains’. In the piece Brian Sozzi, that publication’s editor at large wrote that “What goes up in the stock market inevitably goes down” noting that Wood’s Ark Invest fund had been “one of the hottest ETFs of 2020.” Sozzi goes on to note that in early March Wood’s fund had lost “all of its gains for 2021” when the the ETF shed 5.5%.
It wasn’t just one poor month, however. Ark’s run of bad luck has continued throughout summer. According to a report by the Times, Ark Innovation is now down by almost 4 per cent while the Nasdaq has risen by 14 per cent in the same period.
Now, experts are lining up to question Wood’s previously on-the-money insight. Like sharks around a floundering ship, short sellers are gathering. Most notable of all is Michael Burry — the subject of Michael Lewis’ book The Big Short and the film of the same name. Portrayed by Christian Bale in the 2015 film, Burry made his name by betting against the housing bubble leading up to the 2007 market crash.
Earlier in August it was revealed that Burry’s Scion Asset Management had put options on 235,500 shares of Ark Innovation ETF stock as of June 30 as well as nearly 1.1 million shares of Tesla. In a since deleted tweet,Burry likened Ark to notable failures of the past before saying while Ark is “defining an era”. If you know your history, there is a pattern here that can help you,” he said. “If you don’t, you’re doomed to repeat it.”
“US titans clash as Big Short’s Burry takes on Wood’s ARK” wrote Chris Sloley and Alex Steger in a City Wire article, whose headline feels like it’s missing an exclamation point and a flash of lighting.
The plot thickens, however, with the news that Mark Cuban has backed Wood, touting AI – one of Wood’s main focuses of investment – as “a huge competitive advantage.”
“There are 2 kinds of companies in the world: Those who originate their own AI successfully, and everyone else,” Cuban tweeted. “The top companies are AI dominate and running away from their Non-AI competitors. AI’s competitive advantage is exponential, but nowhere to be seen on a Balance Sheet.”
In response, Wood tweeted that Ark Investment “couldn’t agree more.”
So, with detractors and supporters making their voices heard is the Ark Investment fund finally sinking, or simply weathering stormy seas?
To unlock this article, please subscribe. Benefits include:
- 2 Magazines delivered to your door
- Direct offers and benefits with luxury hotels, clubs, restaurants and handpicked brands
- Invitations to a minimum of 4 member-only events each year
- Paywalled content — access to exclusive online features only for members
- 15% off selected brands online with Gentleman's Journal
- Your own Clubhouse membership card to redeem all the perks