Cathie Wood is backing off of Coinbase (COIN) after steadily snapping up shares of the beaten-down cryptocurrency exchange all year.
ARK Invest offloaded more than 1 million shares of the stock Tuesday on the heels of a Bloomberg report indicating Coinbase is facing an investigation by the U.S. Securities and Exchange Commission (SEC) into whether it improperly let Americans trade digital assets that should have been registered as securities. Shares of COIN closed down more than 20%.
The news adds to existing regulatory scrutiny plaguing the company after a separate charge by U.S. prosecutors in Manhattan last week against a former product manager over alleged insider trading.
ARK sold about 1.4 million shares of Coinbase, valued at roughly $75 million based on Tuesday’s closing price, across three of its exchange-traded funds, according to a daily transaction report published by the firm. The lion’s share of the sale came out of Wood’s flagship Ark Innovation ETF (ARKK), which sold about 1.1 million.
The move suggests Wood’s confidence in Coinbase may have fallen as the largest crypto exchange in the U.S. grapples with deep losses in its stock price amid a broader rout in digital assets, a broader slowdown in growth, and a face-off with the SEC.
ARK Invest was the third-largest shareholder as of the end of June, per Bloomberg data.
Wood’s firm sold Coinbase at all-time lows of $53 per share after purchasing the stock at an average price of nearly $255, per Bloomberg data, dealing a further blow to ARK’s lineup of beleaguered actively-managed funds. The popular ARK Innovation Fund is down more than 50% year-to-date.
As ARK trimmed its position in COIN, the firm loaded up on e-commerce giant Shopify (SHOP) Tuesday after the stock nosedived 14% on an announcement it was laying off roughly 10% of its global workforce.
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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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