Cathie Wood Just Sold Twitter (TWTR) Stock. Here’s Why.


Twitter (NYSE:TWTR) has been in the spotlight for the past month due to the ongoing drama surrounding Elon Musk’s purchase of the company. Musk has pledged to buy the social media platform at $54.20 per share. Recently, it was revealed that the Tesla (NASDAQ:TSLA) CEO plans to serve as Twitter’s temporary CEO if the acquisition is successful. Investors should also expect a major shakeup within the company, as Musk also stated that the company has “too many engineers not doing enough.”

Twitter (TWTR) app being shown on a phone screen held in a person's hand.
Source: Worawee Meepian /

On top of that, Musk received $7.1 billion from outside investors to help with the acquisition. These outside investors include Sequoia Capital, Binance (BNB-USD) and Vy Capital. Both Sequoia and Vy have previously backed Musk’s ventures.

Despite these developments, Cathie Wood’s Ark Invest reported reducing its TWTR stock position yesterday in two of its exchange-traded funds (ETFs). Let’s get into the details of the sale.

Cathie Wood Sells TWTR Stock

On May 5, the Ark Next Generation Internet ETF (NYSEMKT:ARKW) reported selling 718,188 shares. Additionally, the Ark Fintech Innovation ETF (NYSEMKT:ARKF) reported selling 156,738 shares. After the sales, Twitter accounts for less than 1% of either ETF. Across all Ark ETFs, Twitter is the 135th largest holding, with a 0.04% allocation.

In fact, Ark Invest has been steadily selling down its Twitter position since December of last year. The last purchase occurred on Dec. 6, when ARKF purchased 230,883 shares. Since then, Ark Invest has consistently been reducing its stake across ARKW, ARKF and the Ark Innovation ETF (NYSEMKT:ARKK).

Ark Invest started reducing its position before the Twitter acquisition news was publicized. In addition, as part of the Musk acquisition, shareholders will receive $54.20 in cash for each share held. Ark Invest’s sales yesterday were all sold below $54.20, which may suggest that the firm expects downside before the acquisition completes.

What’s Next for Twitter?

Twitter will likely experience massive changes under the helm of Musk. He has hinted at several changes, such as an edit button, releasing Twitter’s algorithm to the public and combatting cryptocurrency scams.

In a tweet, Musk also hinted that he may charge “commercial/government users” a “slight cost” for using the platform. However, he also stated that Twitter would always be free for “casual users.”

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Article printed from InvestorPlace Media,

©2024 InvestorPlace Media, LLC