What happened
Shares of e-commerce giant Shopify (SHOP +5.93%) tumbled 12% on Monday as traders cashed in on a four-day, 52% rally in the stock's price.
Ark Invest CEO Cathie Wood took that sell-off as her cue to dive back in.
Image source: Getty Images.
So what
Data from ARK Invest's publicly disclosed trading activity shows that on Monday, as everyone else was selling Shopify, Wood was buying its shares hand over fist for the Ark Fintech Innovation ETF. Over the course of several hours of frenzied trading, she snapped up 32,635 Shopify shares, deploying nearly 1.5% of the fund's assets to take advantage of traders' short-term trading swing.
As a result of this move, Shopify stock now makes up 2.6% of Ark's overall holdings -- and Shopify stock has become the 11th most-owned stock in its combined portfolio.
Now what
Did you catch those numbers? As everyone else was selling, Wood more than doubled her position in Shopify stock from 1.2% of her various funds' total assets to 2.6% -- in just one day. That seems a remarkably bullish signal to the growth investors who track Wood's investing moves.
It might even be the right move. I admit -- with Shopify down by more than 40% over the last 52 weeks, but still pegged by analysts to experience a greater than 50% earnings growth rate over the next five years, I've been tempted to nibble on the stock myself. That being said, with Shopify trading for 190 times free cash flow and more than 200 times forward earnings, the valuation still looks too rich for my blood.
This is one Shopify-ing spree I won't be participating in.
