Signify Health (NYSE:SGFY) stock is in focus following massive sales from Cathie Wood’s ARK Innovation (NYSEMKT:ARKK) exchange-traded fund (ETF). Signify operates as a healthcare company that uses software and analytics to help employers and healthcare providers with in-home care. Furthermore, the company seeks to provide customers with lower-priced and improved healthcare.
Earlier this week, it was revealed that Amazon (NASDAQ:AMZN), UnitedHealth (NYSE:UNH), CVS (NYSE:CVS) and Option Care Health (NASDAQ:OPCH) were competing to acquire the company. As a result, shares of SGFY stock are up over 25% in the past five trading days.
However, no deal was been finalized and Signify could still remain an independent company. Bloomberg reports that UnitedHealth has submitted the highest offer of over $30 a share, or a valuation of over $8 billion. Meanwhile, Amazon’s offer is “close behind.” The final offers for the company are expected to be disclosed by Sept. 6.
With shares up so much, ARKK has been reducing its exposure. Let’s get into the details.
SGFY Stock: Is Cathie Woods Losing Faith?
Since Aug. 15, ARKK has sold 1.66 million shares of SGFY. Interestingly enough, the sales began before Signify’s potential acquisition by Amazon was announced on Aug. 21. In addition, the last time ARKK purchased shares of SGFY was on Jan. 5. As of Aug. 22, ARKK owned 8.89 million shares of SGFY with a cost basis of $22.28 per share. The company is the ETF’s 29th-largest holding out of 35 total companies.
Since there is no guarantee that Signify will be acquired, Wood may be booking gains on a profitable investment and reducing risk. Wood’s largest sale occurred yesterday when she sold 1.07 million shares. At yesterday’s closing price of $27.99, she stands to gain about 25% on her sale. It would not be surprising to see ARKK continue its sales in the coming days.
Signify stated that it held a board meeting on Monday to discuss the potential offers. There have been no further updates. However, SGFY stock will likely trade in the high-$20 range until an offer is accepted. If no offer is accepted, the stock may trade lower back to the low-$20 range.
On the date of publication, Eddie Pan held a LONG position in AMZN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
