CEO Cathie Wood's Ark Invest firm continues to trim its holdings in Shopify (SHOP +8.34%). The company regularly publishes updates on holdings in its exchange-traded funds (ETFs), and its latest update showed that it sold 48,313 shares of the e-commerce services stock for its ARK Next Generation Internet ETF (ARKW +3.81%) and 120,022 shares of the stock from its Ark Fintech Innovation ETF (ARKF +3.51%) on Aug. 21.
All told, Wood's company trimmed over 170,300 shares of Shopify stock from its holdings on Monday -- worth roughly $9.2 million at the time of the sales. Even more striking, the investment firm poured cash into seven other growth stocks.
What do Wood's recent moves (through Ark Invest) signal for Shopify stock? And what can investors take away from her decision to push into other growth stocks at a time when volatility has once again gripped the market?
Wood sells Shopify to buy this beaten-down fintech
For its Next Generation Internet ETF, Ark Invest essentially used the sale of Shopify shares to build a bigger position in Adyen (ADYE.Y +4.08%) -- a Dutch fintech company that sells point-of-sales hardware and services and provides other technologies that allow merchants to process digital payments through their online stores. Ark bought 736,351 shares of the stock for the ETF on Monday, with the purchase being the company's largest in the day and coming in at more than $6.4 million.
NASDAQ: SHOP
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Meanwhile, Wood's recent $9.2 million sale of Shopify stock followed an approximately $8.9 million combined trimming of the stock across the Ark Fintech Innovation ETF and Next Generation Internet ETF that happened on Aug. 16. Shopify stock has seen some volatile trading following its second-quarter earnings release earlier this month. However, its share price is still up roughly 55.5% across 2023's trading.
Conversely, Adyen plummeted following its recent earnings report, which fell approximately 40% on Aug. 17 after the company delivered weaker-than-expected first-half performance. Its share price continued to slide in subsequent trading.
While the fintech still managed to grow revenue by 21% year over year across the period, growth came in much weaker than expected. The average analyst estimate called for revenue of 853.6 million euros (roughly $922 million); actual sales for the period came in at 739.1 million euros -- or approximately $799 million based on the current exchange rate.
OTC: ADYE.Y
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The big sell-offs pushed the company's share price to its lowest point in over three years. But Ark's recent moves suggest Wood sees opportunity in Adyen following its recent valuation collapse.
Cathie Wood is still bullish on Shopify
Following the recent sale of Shopify shares, the ARK Next Generation Internet ETF now owns roughly $50.4 million worth of the e-commerce stock. The holdings account for roughly 3.9% of the fund's total weight, and the e-commerce stock ranks as the 12th-largest holding in the ETF.
To put things in perspective, the ETF's position in Adyen has been pushed up to approximately $14.5 million. The payment technologies specialist accounts for 1.1% of the fund's total weight and ranks as its 25th-largest holding.
Shopify still ranks as the second-largest overall position in the Fintech Innovation ETF, with holdings worth roughly $78.9 million accounting for roughly 9.3% of the fund's total weight. It seems clear that Wood is still bullish on the e-commerce services provider, but she's been trimming holdings to diversify into other positions.
What's Wood up to in healthcare and biotech?
In addition to purchasing shares in Adyen at the start of the week, Ark Invest added stocks to its ARK Innovation (ARKK +3.53%) and ARK Genomic Revolution (ARKG +2.18%) funds. The company invested in the following healthcare and biotech companies: Ginkgo Bioworks (DNA +0.91%), Accolade (ACCD +0.00%), Recursion Pharmaceuticals (RXRX +5.93%), Crispr Therapeutics (CRSP +0.02%), Adaptive Biotechnologies (ADPT +0.00%), and Intellia Therapeutics (NTLA +1.08%).
- Ginkgo Bioworks specializes in the programming of cells and the custom design of organisms.
- Accolade provides healthcare information services and helps customers navigate benefits, claims, and provider availability in the industry.
- Recursion Pharmaceuticals is a biotech company using a machine-learning-powered drug-discovery platform.
- Crispr Therapeutics is a biotech using gene editing to develop treatments for serious illnesses.
- Adaptive Biotechnologies uses genetic mapping to monitor the human immune system and provide information for biopharmaceutical companies, researchers, and clinicians.
- Intellia Therapeutics is a gene-editing specialist aiming to cure genetic diseases and treat cancers and autoimmune diseases.
The table below breaks down Ark's recent healthcare and biotech by ETF and purchase sizes.
| Stock Purchased | Fund | No. of Shares | Est. Value |
|---|---|---|---|
| Ginkgo Bioworks | ARK Genomic Revolution; ARK Innovation | 202,755 | $336,573 |
| Accolade | ARK Genomic Revolution ETF | 13,950 | $181,629 |
| Recursion Pharmaceuticals | ARK Genomic Revolution ETF | 37,638 | $332,7120 |
| Crispr Therapeutics | ARK Genomic Revolution ETF | 7,017 | $336,324 |
| Adaptive Biotechnologies | ARK Genomic Revolution ETF | 32,165 | $207,142 |
| Intellia Therapeutics | ARK Genomic Revolution ETF, ARK Innovation | 40,810 | $1,543,434 |
Data sources: Ark Invest; Yahoo Finance. Estimated purchase calculations based on prices as of market close on Aug. 16.
The purchases made for the biotech-focused ARK Genomic Revolution ETF look fairly typical for the fund. However, the purchases of Ginkgo Bioworks and Intellia Therapeutics continue an interesting trend for Wood's flagship ARK Innovation ETF. While the ARK Innovation fund remains heavily weighted toward the technology hardware and services companies, a string of recent purchases have given the ETF bigger exposure to biotech.
