Cathie Wood's ARKK tests pandemic low as market sell-off batters fund

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A meltdown across equity and cryptocurrency markets Monday is dragging the flagship ETF for Cathie Wood’s ARK Invest towards pandemic-era lows.

The ARK Innovation ETF (ARKK) fell over 7% in early afternoon trading to just above $37 per share, placing the investment vehicle within striking distance of its March 2020 pandemic closing low of $34.69. In early trading on Monday, shares of ARKK had traded hands as low as $36.33.

Monday’s decline follows a 7% drop on Friday, as markets declined sharply following May’s inflation data.

Each of ARKK’s top ten holdings were deep in the red during the week’s first trading session, with Coinbase (COIN) leading losses, falling as much as 15%. The cryptocurrency exchange platform, which Wood has consistently snapped up shares of amid a decline throughout 2022, comprised 4.1% of ARK Innovation’s portfolio as of Monday.

Other Wood favorites, including Zoom (ZM) and TSLA (TSLA), the two largest positions in ARKK, were each down roughly 5%. Those losses, however, paled in comparison to other companies across the portfolio.

Ginkgo Bioworks Holdings (DNA), CRISPR Therapeutics (CRSP) – ARKK’s fourth-largest position — and DraftKings (DKNG) were the biggest detractors in Monday’s rout, with shares suffering declines of as much as 14%, 13% and 12%, respectively.

Michael Saylor (R), Chairman & CEO, MicroStrategy, speaks during the Bitcoin 2022 Conference, next to Catherine Wood, CEO and CIO at ARK Invest. (Photo by Marco Bello/Getty Images)

The downturn in ARKK on Monday came as stocks sold off more broadly on rising fears that inflation, and aggressive central bank policies aimed to curb surging prices, would tip the economy into a recession.

However, even as these worries have permeated Wall Street, Wood recently doubled down on her longtime stance that deflation – not inflation – poses a greater risk to investors.

In an interview at the UP.Summit in Bentonville, Ark. last week, Wood pointed to inventory pile-ups at major retailers as an indication that inflation will die down.

“This inventory issue highlights the cyclical reason we’ve been saying we think inflation will unravel,” Wood said at the event.

Wood has been known to make bold claims, including a prediction that bitcoin (BTC-USD) will top $1 million by 2030. Bitcoin extended a months-long slide Monday to trade below $23,000, its lowest price level since 2020.

So far this year, ARK Innovation has lost more than than 60%, with the ETF down 75% from its February 2021 all-time high. Before this recent decline towards multi-year lows, ARKK had gained about 12% from mid-May until early-June.

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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