Cathie Wood’s ARK Invest, known for its forward-thinking investment strategies, has once again demonstrated its confidence in Coinbase Global by purchasing shares of the crypto exchange amid a price dip caused by an SEC lawsuit. This move comes as part of Ark Invest’s ongoing support for Coinbase, even amidst the exchange’s legal challenges. While Coinbase’s troubles persist, Wood’s investment firm saw an opportunity to acquire shares at a discounted price, potentially positioning itself for future growth.
Ark Invest’s Latest Purchase:
Following a recent SEC lawsuit against Coinbase, which accused the exchange of acting as an unregistered broker, the price of Coinbase’s shares experienced a nearly 20% drop. Capitalizing on this market downturn, three Ark Investment Management LLC funds purchased a total of 419,324 shares of Coinbase for over $20 million. Bloomberg reports that these purchases were made through the Ark Innovation ETF and two other fund vehicles led by Cathie Wood.
Displaying Confidence in Coinbase:
Ark Invest’s latest acquisitions add to their already substantial stake in Coinbase. According to public records, the investment firm had increased its stake to approximately 9.9 million shares of Coinbase through significant stock purchases earlier this year. Additionally, in May, Ark Invest purchased an additional 168,869 shares of COIN stock, further solidifying its confidence in the exchange.
Ark Invest’s Resilience Amidst Challenges:
Despite facing layoffs during the bear market, Ark Invest has consistently shown faith in Coinbase. Cathie Wood, the firm’s founder, expressed optimism about the exchange’s prospects, even after losing FTX as a competitor. Wood highlighted Coinbase’s CEO’s commitment to regulatory clarity as a positive factor in the company’s future success.
Coinbase’s Ongoing Legal Battles:
Coinbase’s legal troubles extend beyond the recent SEC lawsuit. The exchange has also been served with a Wells Notice regarding the sale of unregistered securities, and state officials are pursuing the company for its staking products. These challenges have contributed to a 17% drop in Coinbase’s stock price over the past five days, with shares currently trading slightly above $53 in pre-market at the time of writing.
Ark Invest’s Changing Perspective:
It’s worth noting that Ark Invest’s position on Coinbase has shifted over time. In July 2022, following the SEC’s initial probe into the exchange, Wood’s funds sold a significant portion of their Coinbase shares, resulting in losses of over $350 million. However, Ark Invest remained bullish on COIN and eventually reinvested in the company, seizing a buying opportunity after missing out on the Nvidia rally.
Conclusion:
Ark Invest’s recent purchase of Coinbase shares amidst the SEC lawsuit demonstrates its confidence in the exchange’s long-term prospects. While Coinbase continues to face legal challenges, Cathie Wood’s investment firm has maintained its support, capitalizing on market dips to increase its stake. As the legal battles unfold, it remains to be seen how Coinbase will navigate these hurdles and whether Ark Invest’s investment will prove fruitful in the future.
