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ARK dumps Tesla shares for Coinbase

Photo of: Joseph Stone
by Joseph Stone

Asset manager ARK Investment Management is getting excited about crypto exchange Coinbase stock. The firm is even selling $178 million of Tesla stock to invest more broadly in COIN stock.

Coinbase’s IPO is a success. The exchange has indeed managed to beat the previous record set by Facebook. At the end of the first day of trading, the firm was worth $86 billion on the stock market.

The second day proved to be more tumultuous, but the stock is still largely oriented upwards. COIN stock is therefore attracting strong interest from institutional investors, including ARK Invest.

Three of the asset manager’s funds bought $246 million worth of Coinbase shares on the first day of trading. ARK Innovation ETF, ARK Fintech Innovation ETF and ARK Next Generation Internet ETF hold 749,205 shares, Reuters reports.

The main fund involved in this transaction is ARK Innovation, which alone holds $168 million worth of COIN. And to complete this transaction, the company decided to reduce its stake in other companies.

Indeed, ARK sold $178 million worth of Tesla shares, but also $4.4 million worth of Intercontinental Exchange shares, the operator of the New York Stock Exchange (NYSE). Yet the manager is a supporter of Tesla, whose stock he estimates could reach $3,000 by 2025.

Evidently, ARK now sees Coinbase as having even more significant potential returns. Its leader, Cathie Wood, admittedly makes no secret of her interest in cryptocurrencies and Bitcoin.

To gain indirect exposure to BTC, ARK has a stake in Tesla, and now also in Coinbase. But the company invests more widely in technology players, such as Square, Shopify or Zoom.

As for Coinbase, if it succeeds in making a splashy entry, it still has a lot to do to increase its value, like Facebook, whose record it broke. With a starting price of $250, the stock quickly reached over $400. By Thursday’s close, COIN was trading at $322, down sharply.