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Cathie Wood-led ARK Investment Management bought a huge stake in Tesla Inc TSLA on Thursday after the EV-maker’s shares fell over 9% following CEO Elon Musk‘s comments on price cuts.
What Happened: Funds operated by ARK purchased over 256,000 shares of the EV-maker at an estimated valuation of over $41.7 million based on Thursday’s closing price. The purchase was done via the flagship ARK Innovation ETF ARKK and the ARK Next Generation Internet ETF ARKW.
Also Read: Everything You Need to Know About Tesla Stock
Tesla is the top holding in ARKK with a weight of 9.38%, according to data available on the firm’s website at the time of writing.
Shares of Tesla closed 9.75% lower on Wednesday after Musk indicated the EV-maker will continue cutting prices despite taking a hit on margins. Tesla’s operating margin fell 779 basis points to 11.4% during the first quarter compared to the same period a year ago.
However, Musk defended the EV-maker’s drastic fall in margins and said pushing for higher volumes and a larger fleet is the right choice versus a lower volume and higher margin.
“We expect our vehicles, over time, will be able to generate significant profit through autonomy. So we do believe we are like laying the groundwork here, and then it’s better to ship a large number of cars at a lower margin, and subsequently, harvest that margin in the future as we perfect autonomy. This is an extremely important point,” Musk said during the earnings call.
The EV-maker reported revenue of $23.33 billion for the first quarter, up 24% year-over-year.
Major Sale: ARK sold over 739,000 shares of e-commerce company Shopify Inc SHOP on Thursday at an estimated valuation of over $35 million based on Thursday’s closing price. Shares of the company have gained over 34% since the beginning of the year.
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