Cathie Wood’s Investment in SpaceX Yields Early Gains Amid Stock Surge

Cathie Wood’s Investment in SpaceX Yields Early Gains Amid Stock Surge

Cathie Wood’s ARK Invest has seen a promising early return on investment after acquiring $20.45 million worth of SpaceX stocks. This purchase occurred just one day before the shares experienced a 7.10% increase, rising to $128.37.

Details of the Purchase

On July 20, ARK Invest disclosed that it purchased a total of 170,634 shares of SpaceX across four of its exchange-traded funds (ETFs). The stock was initially trading below its IPO price of $135. Following this surge, the value of ARK’s investment has now surpassed $475 million, despite ongoing challenges from short selling and other market pressures.

Market Performance

During the trading session on July 21, SpaceX shares rose by $8.52, increasing to $128.37 by late morning, yielding ARK an unrealized gain of approximately $1.45 million. This recovery comes after a 3.34% dip the previous day, marking a significant turnaround from the stock’s post-IPO performance.

Impact of Previous Short Selling

Despite the positive movement, a significant amount of short selling has affected SpaceX’s price trajectory. Data from S3 Partners indicates that short sellers have accumulated around $4 billion in profits over the past month, with approximately 30% of SpaceX’s freely traded shares being shorted, equating to about 192 million shares.

Analysts’ Outlook

The wider market sentiment about SpaceX remains largely optimistic. Analysts have set a median price target of $213.50, suggesting a potential upside of about 66% from the recent trading price. With targets from major financial institutions ranging from $130 to as high as $800, many expect the stock to rebound.

Future Considerations

As investors weigh the stock’s recovery, they are also mindful of upcoming concerns, such as the expiration of SpaceX’s post-IPO lockup on August 19, which could allow an additional 900 million shares to be traded, potentially influencing stock availability and performance.

In summary, the recent surge in SpaceX stock has provided ARK Invest with an early gain on its substantial investments, amidst a complex backdrop of market dynamics and expectations.