ARK Invest
- Cathie Woods’ Ark added 519,000 shares of Roblox to its Next Gen Internet ETF in a $ 36 million stake.
- Roblox started publicly trading on Wednesday after conducting a direct listing.
- The gaming platform skyrocketed in its commercial debut and won again on Thursday after Ark’s announcement.
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Concerns about technology stock valuations and excessive enthusiasm in the IPO market have not stopped Cathie Wood’s Ark Investment Management from its most recent bet.
The company’s popular Ark Next Generation Internet stock market – which is traded under the ARKW ticker – bought 519,086 shares of Roblox, according to a share update published on Wednesday. The stake represents 0.51% of the ETF’s holdings and had a market value of more than $ 36 million at the close of Wednesday.
The investment comes just after the gaming platform completes its direct listing on the New York Stock Exchange. The stock skyrocketed from $ 64.50 to $ 69.50 on its market debut, lending the company a market capitalization of around $ 38 billion.
The post-debut purchase and momentum lifted Roblox even higher at the start of the trading session. The shares gained up 9.1% on Thursday. ARKW gained up to 3.8%.
Direct listings allow companies to make their shares public without offering new shares for sale. Direct listing companies do not raise any capital, but they also avoid subscription fees associated with traditional initial public offerings. The IPO alternative has gained popularity with technology stocks in recent years, with Slack, Spotify and Palantir going public through direct listings.
The week’s price action so far marked a welcome relief for Wood’s products. Ark technology-focused funds have plummeted in recent weeks, as increased Treasury yields have prompted investors to hesitate in the face of high valuations of growth stocks. The technology sector has recovered somewhat as investors buy the drop, but the rotation of months to value still poses a threat to the group.
Roblox’s earnings on Thursday add credibility to Ark’s growing influence on investor flows. Workhorse, Palantir and DraftKings recovered in recent sessions after Ark revealed company stock purchases.
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