Tesla, Inc. TSLA shares have experienced a tumultuous journey this year amidst concerns about the company’s ability to meet first-quarter delivery targets. Undeterred by this setback, Cathie Wood‘s Ark Investment Management made a bold move by actively acquiring Tesla shares on Thursday.
Ark’s Pile-Up: Ark Invest purchased a total of 216,682 Tesla shares across three of its actively managed exchange-traded funds. This investment, amounting to $35.21 million based on Tesla’s closing price of $162.50, was strategically distributed as follows:
- Ark Innovation ETF (ARKK): 161,956 shares
- ARK Autonomous Technology & Robotics ETF (ARKQ): 18,543 shares
- Ark Next Generation Internet ETF (ARKW): 36,183 shares
Tesla Faces Headwinds
Tesla’s stock has been on a downward trend since late 2021, with the decline intensifying from mid-2023 onwards. Several factors have contributed to this downward trajectory:
- EV market slowdown: The electric vehicle market as a whole is experiencing a slowdown.
- Rising interest rates: Higher interest rates typically have a negative impact on growth stocks like Tesla.
- Strategic concerns: Investors are worried about issues such as a lack of transparency in communication, the absence of a low-end vehicle in Tesla’s product lineup, and recent aggressive price cuts.
See Also: Everything You Need To Know About Tesla Stock
Analyst Downgrades and Short Positions
Adding to the pressure, Wall Street analysts are revising down their delivery estimates for Tesla’s first quarter, indicating that their initial forecasts may have been overly optimistic.
Furthermore, prominent investors like longtime Tesla supporter and investor Kevin Paffrath have taken bearish positions, with some predicting a near-term decline to $148 or even $101. Additionally, Gary Black of Future Fund has substantially reduced his fund’s Tesla holdings.
Wood Remains Bullish: Despite prevailing bearish sentiments, Cathie Wood continues to hold a predominantly positive outlook on Tesla and its long-term prospects. Tesla remains the third-largest holding in her flagship ARKK fund, representing 7.36% of its portfolio with a value of $574.88 million.
Other analysts, such as Wedbush’s Daniel Ives, also maintain optimism, banking on advancements in AI technology to potentially drive Tesla’s stock in the future.
Market Performance: Tesla concluded Thursday’s trading session with a 4.12% decline, closing at $162.50—the lowest closing price since May 4, 2023. ARKK also experienced a 3.22% decrease, closing at $48.74, according to Benzinga Pro data.
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Read Next: Fund Manager Substantially Reduces Tesla Holding, Citing 2 Reasons That Undermine His Positive View
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