Star investor Cathie Wood, CEO of Ark Investment Management, keeps on catching the falling knives.
She has insisted in recent weeks that the fall of young technology stocks has simply created buying opportunities. And Ark has been buying aplenty.
On Friday, its exchange-traded funds picked up shares of streaming platform Roku (ROKU) – Get Roku, Inc. Class A Report, video meetings platform Zoom Video Communications (ZM) – Get Zoom Video Communications, Inc. Class A Report, digital entertainment/e-commerce company Sea Ltd. (SE) – Get Sea Ltd. (Singapore) Report and online video game platform Roblox (RBLX) – Get Roblox Corp. Class A Report among other companies.
Ark purchased 694,584 shares or Roku, worth $78.1 million as of Friday’s close; 82,488 shares of Zoom, worth $10.5 million; 40,384 shares of Sea, worth $5.2 million; and 65,057 shares of Roblox worth $3.2 million. Roku is the No. 3 holding in Wood’s flagship Ark Innovation ETF (ARKK) – Get ARK Innovation ETF Report, and Zoom is No. 4.
Ark explained its thinking about Roku, Sea, and Roblox in a written commentary.
As for Roku, the company said in its fourth-quarter earnings report that active accounts increased to more than 60 million, surpassing the number of video subscribers combined at all the cable companies in the U.S., Ark said.
“Although U.S. consumers spend 45% of their viewing hours on streaming TV today, advertising on streaming TV accounts for only 18% of total TV advertising budgets, a gap we expect to close,” Ark said. “Roku is the leading TV operating system in the US and is beginning to scale internationally.”
When it comes to Sea, the stock stumbled last week after India banned one of the company’s video games. “While regulatory uncertainty shrouds Sea’s growth potential in India, we believe the company could continue to take share in Southeast Asia and expand across Latin America and Europe,” Ark said. “Sea Limited provides e-commerce, digital entertainment and fintech platforms across emerging markets.”
Turning to Roblox, “having paid $500 million to its young developer community and continuing to lower barriers to creation with Roblox Studio, [the company] should continue to increase its share of the developer and gamer communities,” Ark said.
“Roblox provides a creator-first digital entertainment platform and 3D engine that allow third-party developers to create games and experiences for users globally.”
Wood bought shares of Roku, Zoom, and Roblox on Thursday as well. But she’s not just focused on buying. Ark sold 13,512,416 shares of data-mining company Palantir Technologies (PLTR) – Get Palantir Technologies Inc. Class A Report Friday, worth $148.9 million at Friday’s close. Ark sold Palantir Thursday too.
Ark noted that Palantir shares slid 16% Thursday, after the company reported fourth-quarter earnings. “While surpassing revenue expectations with 34% year-over-year growth thanks to success in U.S. commercial, Palantir reported a significant deceleration in growth in the larger government division, suggesting perhaps a change in government procurement behavior,” Ark said.
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