Cathie Wood-led Ark Investment Management lowered exposure to Tesla Inc (NASDAQ: TSLA) on Wednesday when its stock fell in regular trading hours and piled up more shares in the cryptocurrency-linked fintech Coinbase Global Inc (NASDAQ: COIN) on the dip.
The popular money managing firm sold 67,884 shares, estimated to be worth $66.3 million, in the Elon Musk-led electric vehicle company.
Tesla stock closed 4.96% lower at $977.2 on Wednesday but rose 5.5% in extended trading after quarterly results. Shares of the company are down 18.6% year-to-date.
On the same day that Tesla reported earnings, Wood sold $66 million of Tesla or 67,884 shares. The fund manager owns the EV company through three of her exchange-traded funds (ETFs): Ark Innovation ETF (NYSEARCA: ARKK), Ark Autonomous Technology & Robotics ETF (BATS: ARKQ), and Ark Next Generation Internet ETF (NYSEARCA: ARKW).
The next day, Wood sold another $94 million of TSLA stock or 93,160 shares. After the sale, the three ETFs still hold 1.39 million shares of Tesla.
In an interview with Bloomberg earlier this month, Wood explained, “We have been selling (Tesla) recently because of how well it has done relative to the rest of the stocks in our portfolio. It has been a good source of cash, and we have taken profits and deployed them into other stocks that we feel have been unfairly punished.”
Wood has also previously stated that Ark ETFs have a “self-imposed” restriction limit on investing 10% of an ETFs asset into a single company. As a result, she often sells Tesla when its allocation gets to or near 10%. As of yesterday, Tesla accounts for 9.36% of ARKW, 10.5% of ARKQ, and 10% of ARKK.
Electric Vehicles: Xpeng in, Tesla Out
On the EV maker front, Ark Autonomous Technology & Robotics ETF (ARKQ) bought 93,466 shares of China’s XPeng (XPEV) valued at $2.2 million. XPeng is the 22nd biggest holding in Ark Autonomous Technology.
Ark Invest held 919,008 shares, worth $22.8 million, in Xpeng before Thursday’s trade. The money managing firm first bought shares in Xpeng last December.
Wood Believes in Tesla
Earlier this week, Wood adjusted her Tesla price target for 2026 to $4,600. The bull case price target is $5,800, while the bear case target is $2,900. Ark assigns the bull and bear scenarios with a 25% probability.
Wood and her team believe that Tesla’s potential robotaxi business will be very profitable and contribute more than 50% of Tesla’s value by 2026.
In the Q1 earnings call, Musk stated that Tesla is aiming to produce a vehicle in high volume by 2024 that is “highly optimized for autonomy, meaning it would not have steering wheels or pedals.”
Finally, Ark believes that Tesla will sell 10 million EVs in 2026 under the bear scenario. In the bull scenario, the investment team expects Tesla to sell 17 million EVs in 2026. In 2021, Tesla delivered 936,172 EVs worldwide
