Cathie Wood’s ARK quickly increased its stake in Coinbase (NASDAQ:COIN) picking up over US$100mln of additional shares on the bitcoin and crypto exchange’s second day of stock market trading.
ARK bought some US$110mln of Coinbase stock on Thursday, according to the fund manager’s daily trading notifications – a subscription alert service provided by closely followed ‘retail investor’s champion’.
Before that, ARK funds bought up US$246mln of shares amidst Wednesday’s Nasdaq debut.
It has picked up some 750,000 shares and adding to prior holdings ARK’s funds reportedly together hold more than 1mln shares.
ARK, which manages ‘active ETFs’, targets investment disruptive companies and innovators which it says are “often not priced correctly by traditional investment strategies because people may not understand how big the ultimate opportunities are going to be.”
The funds favour momentum-based trading strategies and as one of very few investment brands with a bullish position on some of Reddit‘s favourite so-called ‘meme-stocks’, it quickly garnered a following among the emerging new generation of retail investors.
Founder, CIO and chief executive Catherine (Cathie) Wood is meanwhile propelled, at least in some demographics, to a level of reverence and stock market celebrity normally reserved for the likes of Warren Buffett.
Press reports noted that on Wednesday ARK divest some of its holdings in Uber, ahead of the Coinbase transactions.
Coinbase stock closed Thursday’s session at US$322.75, down 1.68%, and they remain at a steep premium to the US$250 per share reference price set prior to Wednesday’s float.
The company describes its platform as “the easiest place to buy and sell cryptocurrency”.
Launched in 2012 by founder and chief executive Brian Armstrong, now aged 38, Coinbase became established in the early days of cryptocurrency trading. It allows its customers to exchange bitcoin and the gamut of cryptos including Ethereum, XRP, Litecoin, Dogecoin and many others.
Like a stock market brokerage platform it charges customers a transaction fee. It also provides crypto-wallet services which essentially allows customers to ‘store’ their crypto assets. At the same time, it provides business-to-business services including prime brokerage and custody, drawing further parallels to a stockbroking business model.
Whilst the customer-facing services are akin to a brokerage, others prefer to compare Bitcoin to exchanges like the Nasdaq, CME or the Intercontinental Exchange (ICE).
Wednesday’s stock market debut comes via a ‘direct listing’ which means now new shares were sold and new news funds were raised via IPO, instead only existing shares are being sold on the market.