Cathie Wood went on TV to defend her ARK funds’ bad performance. It didn’t go as planned

Market Trading EssentialsFebruary 18, 2022

2 minutes read

Cathie Wood’s flagship fund Ark Innovation ETF (ARKK) is down 30% year-to-date and is more wildly volatile than practically any fund on the market. So when Wood was invited onto CNBC’s Halftime Report, she took it as an opportunity to defend the fund and its deflated price, now down to $68.80 from its peak of $155 a year ago.

“We’ve had a significant decline,” Wood said, adding “we do believe innovation is in the bargain basement territory.” She noted that while her ETF wasn’t performing at its best, her stocks were still “way undervalued” and the recent fund loss was only temporary. Then Zoom gave her 10 minutes to wrap up the interview as the call’s 40 free minutes were almost up.

Having Zoom ask if she were “Running out of time?” was probably not a good look for Wood, who has been rapidly buying up shares in Zoom and other tech companies that have dipped since their pandemic heights. Zoom, along with Wood’s other big tech holdings in Teladoc Health, Roku, and Roblox, are all down between 20% and 40% year-to-date as fears of rising interest and inflation rates have depressed tech shares.

Short ARK

But a big part of interview was focused around a more personal attack against Cathie Wood, who was named best stock picker in 2020 by Bloomberg’s then Editor-in-Chief Matthew Winkler, after she correctly predicted Tesla would be one day be worth more than $1 trillion.

When asked about the Short Innovation ETF (SARK), an ETF launched late last year by Tuttle Capital Management—which tracks the inverse performance of ARKK using swaps contracts for the sole purpose of betting against Cathie Wood’s picks—Wood dismissed it outright. “They’re not doing any research. They are simply shorting innovation,” she said.

Of course, SARK isn’t betting against innovation, it is betting against Cathie Woods. “Well, we stand for innovation,” Wood retorted. The SARK ETF has jumped 55% since its launch, while the ARKK ETF has declined by 42% over the same period.

Tuttle Capital Management’s CEO Matthew Tuttle responded with his own view on the SARK ETF, calling it a “tool” for investors. SARK can be used “to express a bearish view on the market, innovative companies, the current rising rate environment, or a [specific] portfolio manager if they wish. It is un-American to not have choices in the marketplace,” Tuttle told Insider on Thursday.

Either way, Wood is forging ahead. Her only fear now are bearish calls on her ETF. “Our biggest concern is that our investors turn what we believe are temporary losses into permanent losses,” Wood said.

Twitter Reax

Cathie Wood pontificating on CNBC as $ARKK stock sinks in real time next to her is art. pic.twitter.com/Y2H3vEoeL2

— Robert Smith (@BondHack) February 17, 2022

$ARKK vs. dotcom bubble ? Watching it for the while, it just doesn’t want to break. Ht @t1alpha pic.twitter.com/8nYH7mgKMZ

— Michael A. Arouet (@MichaelAArouet) February 12, 2022

The Zoom interruption was an easy target.

Cathie Wood, whose $ARKK holds $753M of $ZM, running into free account 40-minute limit pic.twitter.com/A0xU6n2EbA

— Jon Todd (@yontodd) February 17, 2022

Zoom is asking if ARKK is running out of time pic.twitter.com/9an0cHr5PG

— John W. Rich (Fake Tech Exec) (@Cokedupoptions) February 17, 2022

Wood defended the Zoom cut, noting CNBC were the cheap ones, not ARK…

CNBC may have a 40 minute time horizon, but ARK's is 5 years. Thanks for having us on @CNBC, we're happy to pay for your upgraded Zoom account. You can't be a knowledge worker without it! ? pic.twitter.com/d3u6d66oLN

— ARK Invest (@ARKInvest) February 17, 2022

And others are musing on the state of affairs within ARK now.