SHOP Stock’s Drop Hits Wood’s ARKF ETF

Shopify Inc.’s shares declined even as the Canadian software maker reported earnings that beat estimates, pulling down a pair of ARK Investment Management ETFs that are the stock’s top holders. 

The company, held in 73 exchange-traded funds, fell 5.5% in midday trading. Before today, it had gained 75% this year.  

At the same time, Cathie Woods’ ARK Fintech Innovation ETF (ARKF) fell about 1%. That fund’s 10% Shopify allocation is the biggest among all ETFs. It had gained 67% this year. Another ARK fund, the ARK Innovation ETF (ARKK), has the greatest number of Shopify shares, at 5.6 million. That fund fell 1.2% today. Shopify is the ETF’s No. 10 holding, according to Cathie’s Ark, worth $62.4 million.  

Shopify, whose software is used in stores and by online retailers for payments and other services, yesterday reported sales and profit that beat analyst estimates. The company, in the midst of a turnaround, also said it expects revenue to grow in the mid-20% range after adjusting for the sale of its logistics business. 

Shopify has around 15.4 million shares in the U.S. ETF market. On average, U.S. ETFs allocate 1.76% of SHOP stock to their portfolios, according to etf.com data. 

Additionally, the SHOP stock is a favorite for active and vanilla ETFs. It is also most likely to belong to broad-based ETFs. The best-performing ETF in the past 12 months with SHOP as a holding is the Fidelity Crypto Industry and Digital Payments ETF (FDIG), with a return of 46%. 

SHOP Stock Drops, But Shares of Confluent Jump 

Confluent Inc., whose data streaming services are used by companies ranging from BMW to Citigroup Inc. to eBay Inc., also contributed to ETF price movements Thursday. The stock jumped 15% after the company said second-quarter earnings topped analysts estimates.  

Confluent’s biggest ETF holder by allocation is the Spear Alpha ETF (SPRX). That fund allocates a 4.1% stake to Confluent shares worth $509. That ETF rose less than 1% today. The First Trust Dow Jones Internet Index Fund (FDN) holds the biggest stake by value, at about $66 million. 

Contact Ron Day at [email protected] or follow him on Twitter at @RonDayETF