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Cathie Wood bet more on Robinhood before lousy results

ARK Investment Management, the firm led by Cathie Wood, expanded its bets on Robinhood Markets Inc. days before the quarterly results, in which the brokerage fell short of expectations.

A pair of exchange traded funds Ark bought more than 836,000 shares – worth at least $ 32.4 million – of Robinhood in the two days leading up to the company’s third-quarter earnings report released Tuesday night.

On Wednesday, the bet took a hit when the shares of Robinhood fell as much as 13% to trade below their IPO price after cryptocurrency transactions fell.

Wood’s flagship fund, the ARK Innovation ETF (ARKK), is down 3.9% this year, in contrast to the more than 20% performance of the S&P 500 index.

The actions of Robinhood They fell 58% from an August record and ARK’s bet on the brokerage firm’s future faces strong headwinds. The firm is among the five largest holders of shares.

But Wall Street’s harsh reception to the results of Robinhood it contrasts with the buy-down mentality of individual investors. The stock was trending on the Stocktwits chat room, where retail traders discussed buying the broker’s shares. It is also among the most actively purchased assets on the Fidelity platform along with Tesla Inc.

It is worth noting that Ark has been adding positions steadily since the debut of Robinhood in July. Wood has expressed his opinion on his five-year investment horizon, which he takes into account in his investments despite the daily volatility.

ARK bought at least $ 32.4 million worth of shares on Monday and Tuesday, according to daily trading data from Ark Investment Management. Ark had a stake of approximately 9.74 million shares in Robinhood, worth about $ 385 million as of Tuesday’s close, Bloomberg data shows.

Robinhood He warned investors that the more repressed retail operating environment could persist through the end of the year as the pace of new user sign-ups slows.

Daily trading updates from Ark they show only the actions of the investment management team.

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