ARK was among the big winners of the pandemic era, which featured big gains in shares of many unprofitable companies and cryptocurrencies, such as bitcoin, as a result of low interest rates and extensive stimulus. Investors in these assets are now facing a rising interest-rate environment that stands to be much less forgiving to unprofitable firms or those trading at high valuations.
The ARK Innovation ETF is down 24% this year, matching its decline in 2021. The fund has lagged well behind the broader stock market, which has come under pressure, too. The S&P 500 and Nasdaq Composite have fallen 7.3% and 12%, respectively, in 2022 after logging double-digit increases last year.
ARK has largely stuck to its strategy of buying and holding shares of companies it believes offer the greatest potential for change and innovation. Tesla Inc., Roku Inc., and Teladoc Health Inc. were the top three holdings in the innovation fund as of Friday. That is similar to early 2021, when Tesla, Roku, and Block were the top three, with Teladoc coming in fifth.
Tesla, Roku, and Teladoc are all down at least 19% in 2022, partly reversing large gains in 2020 when the pandemic turned them into stock-market darlings.
The electric vehicle stock remains one of the largest positions from Ark Funds, maintaining the top position in Ark Innovation ETF (ARCA: ARKK), Ark Next-Generation Internet ETF (ARCA: ARKW) and Ark Autonomous Technologies & Robotics ETF (BATS: ARKQ) representing sizes of 9.75%, 9.01% and 10.43% respectively.
Tesla shares underwent a five-for-one share split in August 2020, making the price target from Wood a split-adjusted $800 per share for Tesla. In January 2021, Wood’s prediction came true, with Tesla passing the $800 level. Tesla shares hit an all-time high of $1,243.39 in November 2021.
An investment of $1000 in Tesla on 1 Jan, 2021, which about 1.25 shares of Tesla on the price of $800 that day. Today their value is not more than $900 of total investment.
Tesla share is about 9 percent down from 1 Jan, 2021.
The telemedicine and virtual healthcare company Teladoc Health (TDOC) – Get Teladoc Health, Inc. Report, which is down over 40% year-to-date, is a top holding in the ARK Innovation ETF, the ARK Next Generation Internet ETF, the ARK Genomic Revolution ETF, and the ARK Fintech Innovation ETF.
On that Note, if you invested $1000 on 1 Jan, 2021 then today with a massive capital destruction you have around $240. Teladoc is still down more than 75% from 1 Jan, 2021.
Square ultimately made it to a new all-time high of $283.19 in February 2021, but the stock has consolidated in a wide range of between around $200 and $280 ever since. Square’s highs correlated roughly with the peak in the Bitcoin rally, and investors may be concerned that a repeat of Bitcoin’s disastrous 2018 could be coming again in the second half of 2021.
Traders may continue taking profits in the stock after a big run since the start of 2020. They may also be concerned about regulatory crackdowns on big tech stocks. A potential rotation our of growth stocks and into value stocks could also weigh on Square’s performance.
If you invested $1000 in square on 1 Jan, 2021, then today you have around $450 in your hand. Square is down almost over 55 percent from that day.
The stock price has been under extra pressure partly due to Block’s recent acquisition of Afterpay. The buy-now-pay-later (BNPL) business could make Block more sensitive to rising interest rates. If a little interest rate exposure allows merchants to easily offer BNPL as a payment option for big-ticket items they might not have purchased otherwise, it’s worth the risk.
In recent years, Roku has expanded beyond over-the-top streaming devices. It has launched the Roku TV operating system and the free ad-supported Roku Channel. Roku is expanding its content and advertising businesses. In March, Roku acquired the Advanced Video Advertising (AVA) business of Nielsen Holdings PLC (NYSE: NLSN). Later in the month, Roku acquired the “This Old House” business, including the show’s library of more than 1,500 episodes.
Fortunately for Roku investors, the COVID-19 pandemic in 2020 was actually very good for Roku’s business. While other companies were dealing with economic shutdowns, people around the world who were sheltering in place had little to do for entertainment other than stream movies and TV shows.
The stock ultimately peaked at $486.72 in February 2021 before pulling back to around $375. Traders may be taking profits in the stock, after its huge run in the past year. Or they may simply see 2020 pandemic comps setting Roku up for some lackluster growth numbers in coming quarters.
Roku is facing a few factors putting short-term pressure on revenue and earnings growth. First is the supply-chain issue that touches just about every industry selling physical goods these days. This problem actually impacts multiple parts of Roku’s business.
But after in July stock is continuously diving and now stock is down more than 70 percent from that day. If you invested $1000 on 1 Jan 2021 then today you have $250 in your pocket.
Zoom Video Communications
Shares of Zoom have been falling along with just about every other tech stock that shot way up during the early days of the pandemic. The company also upset investors with softer-than-expected guidance for 2022. It turns out there are a lot of small businesses that no longer feel they need Zoom subscriptions now that they can bring employees and others together in person again.
Zoom faces a challenge with its smallest customers, but that segment isn’t where the money is. A recent survey from consulting firm PriceWaterhouseCoopers found that the vast majority of U.S. employees whose jobs allow for remote work want to work remotely. At least they want to be able to work remotely often enough to justify their employers’ Zoom subscriptions.
Zoom is slipping from its all time high of $559 on 16 Oct, 2021. However, if you invested $1000 on 1 Jan, 2021 then you would have around $300 in your account. As stock is falling more than 70 percent since that day.
Coinbase Global (NASDAQ:COIN), one of the largest cryptocurrency trading platforms in the world, went public through a direct listing last April with a reference price of $250 per share. The stock started trading at $381, hit its all-time high of $429.54 that day, and closed at $328.28.
In related news, some officials in Ukraine are calling on Coinbase and other crypto exchanges to ban all transactions for Russians. The company is following international sanctions against Russia, but says it will not levy a blanket ban on crypto trading for all Russian citizens.
Coinbase also released fourth-quarter 2021 earnings at the end of February that demonstrated its ability to withstand wild fluctuations in crypto prices and continue growing. Net revenue was double what it was in the third quarter, and 401% higher than in the fourth quarter of 2020 as trading volume exploded higher.
If you invested $1000 in their IPO of coinbase, then today you have around $500 in you pocket. Shares are down more than 50 percent.
Shares of medical diagnostic company Exact Sciences (NASDAQ:EXAS) fell by a jaw-dropping 41% over the whole of 2021, according to data provided by S&P Global Market Intelligence. Although the novel cancer diagnostic company saw a healthy rise in sales last year. This sales growth is widely expected to continue in 2022. Exact’s staggering losses haven’t been sitting well with shareholders of late.
During the first nine months of 2021, for instance, Exact lost a noteworthy $634 million. What’s more, the company is on track to remain cash flow negative for the foreseeable future.
Today this stock’s price is about $62 per share. If you invested $1000 in Exact Science on 1 Jan, 2021 then you have about $500 in you hand per share. Stock is down almost for 50 percent.
Unity Software (NYSE:U) is one of them, losing more than 40% of its value so far this year. But Unity’s products and services are likely to remain in solid demand for years to come, which is why it should be able to sustain its outstanding pace of growth in the long run.
Unity Software is benefiting big time from the growing demand for real-time 2D and 3D content. Primarily known for its Unity gaming engine, which controls a 48% share of the video game engine market — which is expected to hit $3.65 billion in value by 2024. Unity Software is already operating in a lucrative space.
If you invested $1000 in Unity Software then you have almost $580 today in you hand as a capital. As share is down more than 40% from that day.