Investment firm ARK Invest shows confidence in Robinhood's growth potential while diversifying its portfolio
ARK Invest, the investment firm led by Cathie Wood, has made a significant investment in the trading platform Robinhood (HOOD). The firm purchased $9.5 million worth of shares in Robinhood, a move that came on the heels of Robinhood's announcement of its plans to expand into Europe.
Robinhood, in its third-quarter earnings statement, revealed its plans to launch brokerage operations in the UK and introduce crypto trading in the European Union. This move is seen as a significant step towards expanding its global footprint and diversifying its offerings to cater to a broader market.
Following this announcement, ARK Invest purchased a combined 1,141,046 shares of Robinhood through its ARK Innovation ETF, ARK Next Generation Internet ETF, and ARK Fintech Innovation ETF. The investment firm's move indicates its confidence in Robinhood's growth potential, despite the trading platform's shares seeing only a modest increase this year.
In addition to its investment in Robinhood, ARK Invest also made another significant move. The ARK Next Generation Internet ETF sold units of Grayscale Bitcoin Trust (GBTC) worth $1.34 million. This is noteworthy as GBTC has outperformed Bitcoin and major US stock market indices this year, and its discount relative to net asset value has narrowed.
ARK Invest's recent moves underscore its strategic approach to investing in promising platforms and technologies. The firm's significant investment in Robinhood following its European expansion announcement indicates a bullish outlook on the trading platform's growth prospects. At the same time, the sale of GBTC units suggests a careful balancing of risks and rewards in the volatile cryptocurrency market.
