What happened

Shares of cryptocurrency exchange Coinbase Global (COIN 5.23%) were down 6% as of noon ET on Thursday. By contrast, the cryptocurrency market and the stock market were actually slightly up, suggesting a problem specific to Coinbase. And as crazy as it sounds, it could have something to do with a completely unrelated business called Teladoc Health

So what

Shares of Teladoc Health are down a crushing 48% as of this writing because the company was hit with a greater than $6 billion goodwill impairment charge related to its 2020 acquisition of Livongo Health. This is a beloved stock of Cathie Wood, head of Ark Invest. Indeed, Ark Invest's Ark Innovation ETF had made Teladoc its third-largest position in the fund with a nearly 7% allocation.

A visibly tired business person rubs their eyes with a down stock chart in the background.

Image source: Getty Images.

Teladoc is just the latest Ark Invest favorite that has plummeted. Keep in mind that the Ark Innovation ETF has outperformed the market average since inception. And for this reason, many retail investors watch Ark Invest's moves and buy the stocks it has high conviction in. This applies to Coinbase as well, considering it's the fifth-largest position in the Ark Innovation ETF.

Ark Invest's stock picks have performed incredibly poorly of late and Teladoc's plunge may be enough to motivate retail investors to sell Coinbase stock today before its own plunge worsens -- it's already down almost 70% from its high. 

It's also within the realm of possibility that Ark Invest itself is a seller of Coinbase stock today, rebalancing its holdings in light of Teladoc's fall. However, that's still speculation as of this writing; its holdings haven't been updated yet.

Now what

Underperformance for Teladoc or other Ark Invest picks isn't necessarily a bad omen for Coinbase. Coinbase is its own company and is expected to report quarterly financial results in May. Perhaps it will beat expectations. Perhaps it will miss. But either way, its business performance will be unrelated to Teladoc and Ark Invest.

I believe the takeaway for readers is to know why you own what you own. Following investors like Cathie Wood can help lead you to some interesting companies and you can learn a lot from the commentary of seasoned investors. But in the end, you need to have your own investing thesis by which you make decisions to buy or sell.