Wood’s ARK Buys Reddit Shares in IPO
ARK buys around 10,000 RDDT shares, which soared Thursday before Friday's decline.
Cathie Wood’s Ark Investment Management purchased nearly 10,000 shares of Reddit Inc. on its first day of trading, taking a small bite of the social media platform that followed a stellar debut with a small decline.
ARK bought about a half-million dollars worth of Reddit shares, which rallied 48% in their debut. Determining if ARK's investment paid off wasn't possible since the purchase price wasn't available immediately. The stock swung between $57.80 and $45.05 on its first day, and while it's dropping today from yesterday's closing price, the price didn't reach yesterday's low.
The ARK Next Generation ETF (ARKW) purchased 5,914 shares on Thursday, while the ARK Fintech Innovation ETF (ARKF) purchased 4,068 shares.
Wood has become somewhat of a lightning rod for tech investing due to her big bets on bitcoin and Tesla, as well has big losses in her funds. Ark's flagship, the Ark Innovation ETF (ARKK) has lost 25% over the past three years compared with the SPDR S&P 500 ETF Trust (SPY) 12% gain over the same period.
ARKW's 54% gain and ARKF's 61% jump over the past year tops SPY's 33% increase.
Reddit's Public Market Debut
Reddit is the first social media company to go public since 2019, according to CNBC. The public market debut of the discussion-based platform is another sign of life for the slowly resuscitating IPO market, which has slowed in the past few years due to high interest rates and public market volatility.
As a mid-cap media stock, Reddit could eventually be included in funds such as the Vanguard Mid-Cap ETF (VO) or social media focused ETFs like the Global X Social Media ETF (SOCL).
Beyond ARK's funds, Reddit's stock has also been added to IPO ETF First Trust U.S. Equity Opportunities ETF (FPX) , according to data from Bloomberg ETF analyst Eric Balchunas.
Contact Lucy Brewster at [email protected].
