The Big Short part two: How an online hero is taking on Wall Street’s most infamous short seller

Catherine Wood hugely successful Ark Investment fund has hit rocky water. As the shorters gather, we ask: what’s next?

Its been a rocky year for Catherine Woods 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 publications editor at large wrote that What goes up in the stock market inevitably goes downnoting that Woods Ark Invest fund had been one of the hottest ETFs of 2020.Sozzi goes on to note that in early March Woods fund had lost all of its gains for 2021when the the ETF shed 5.5%. 

It wasnt just one poor month, however. Arks 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 Woods 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 Lewisbook 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.”

Catherine Woods' ARK fund is on a run of bad luck

“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?

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