Ark Invest sells Coinbase shares, buys into Robinhood amid crypto strategy shift

13 views 4:39 pm 0 Comments November 28, 2023

Ark Invest sold approximately $5.3 million worth of Coinbase stock on Monday, totaling 43,956 shares. The sale comes as Coinbase’s stock hit a peak of $121.67, a level it hasn’t seen in over a year. Despite this high, the fund has gradually reduced its position in Coinbase throughout the year, including a substantial $103 million sale in July. It has also trimmed its investment in the Grayscale Bitcoin Trust by selling around $3 million shares.

Ark Invest’s decision to lighten its Coinbase holdings is part of a broader strategy that has seen the fund pivot towards other fintech companies, such as SoFi (NASDAQ: SOFI) while navigating an evolving cryptocurrency market landscape. The fund’s management appears to respond to the increasing regulatory scrutiny faced by industry players, including Binance, by diversifying its portfolio.

In contrast to its divestment from Coinbase, Ark has been bolstering its position in Robinhood. The Ark Fintech Innovation ETF and ARK Next Generation Internet fund have channeled the investment. This decision comes even as Robinhood’s stock has yet to demonstrate strong growth this year and has recently declined. Nevertheless, Ark Invest recognizes potential in Robinhood’s expansion plans into the European Union and the United Kingdom markets and has chosen to invest with an eye on future opportunities.

In light of Ark Invest’s recent portfolio adjustments, a closer look at real-time data and insights from InvestingPro may provide additional context for investors. For Coinbase (COIN), three analysts have revised their earnings for the upcoming period, indicating a potential positive shift in future performance. However, according to the RSI, the stock is currently in overbought territory, suggesting that caution may be warranted despite its significant return over the last week. For more insights, investors can refer to the 12 additional InvestingPro Tips available for Coinbase at InvestingPro.

Turning to Robinhood (HOOD), management’s aggressive share buybacks and accelerating revenue growth are notable. Analysts are also expecting net income growth this year, contrasting with the two analysts who have revised their earnings downwards for the upcoming period. Robinhood does not pay dividends to shareholders, which might influence investors looking for income-generating stocks. Additional insights can be found in the 10 InvestingPro Tips for Robinhood, available with a subscription.

InvestingPro Data for Coinbase indicates a market cap of $30.65 billion and a negative P/E ratio, reflecting the company’s current lack of profitability. However, the stock has experienced a 1-week total return of 13.54% and a 1-month total return of 69.21%, demonstrating recent strong performance.

For Robinhood, the market cap is $7.4 billion, with a similar negative P/E ratio. The company has seen a revenue growth of 32.29% over the last twelve months as of Q3 2023, which may interest investors focused on growth metrics.

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