Tag: cathie wood

ARK Innovation – ARKK Holdings

Fund Description and Objective

ARK defines ‘‘disruptive innovation’’ as the introduction of a technologically enabled new product or service that potentially changes the way the world works.

Companies within ARKK include those that rely on or benefit from the development of new products or services, technological improvements and advancements in scientific research relating to the areas of DNA technologies (‘‘Genomic Revolution”), industrial innovation in energy, automation, and manufacturing (‘‘Industrial Innovation’’), the increased use of shared technology, infrastructure and services (‘‘Next Generation Internet’), and technologies that make financial services more efficient (‘‘Fintech Innovation’’).

ARKK is an actively managed ETF that seeks long-term growth of capital by investing under normal circumstances primarily (at least 65% of its assets) in domestic and foreign equity securities of companies that are relevant to the Fund’s investment theme of disruptive innovation.


Fund Company Ticker Shares Market Value($) Weight(%)
ARKK TESLA INC TSLA 3757946 $ 2,488,361,523.36 10.63
ARKK TELADOC HEALTH INC TDOC 7523212 $ 1,457,547,092.88 6.23
ARKK SQUARE INC – A SQ 6529246 $ 1,457,327,707.20 6.23
ARKK ROKU INC ROKU 3795070 $ 1,298,824,756.80 5.55
ARKK ZILLOW GROUP INC – C Z 6119415 $ 823,000,123.35 3.52
ARKK BAIDU INC – SPON ADR BIDU 3110407 $ 813,526,950.85 3.48
ARKK SHOPIFY INC – CLASS A SHOP 644894 $ 749,366,828.00 3.2
ARKK ZOOM VIDEO COMMUNICATIONS-A ZM 2185394 $ 742,509,465.44 3.17
ARKK SPOTIFY TECHNOLOGY SA SPOT 2717881 $ 726,489,591.30 3.1
ARKK CRISPR THERAPEUTICS AG CRSP 5557003 $ 702,905,309.47 3
ARKK INVITAE CORP NVTA 15979850 $ 653,735,663.50 2.79
ARKK EXACT SCIENCES CORP EXAS 4834402 $ 638,189,408.02 2.73
ARKK TWILIO INC – A TWLO 1618462 $ 573,615,302.04 2.45
ARKK UNITY SOFTWARE INC U 5086108 $ 494,318,836.52 2.11
ARKK DOCUSIGN INC DOCU 2204232 $ 458,392,086.72 1.96
ARKK PURE STORAGE INC – CLASS A PSTG 19516614 $ 429,560,674.14 1.84
ARKK INTELLIA THERAPEUTICS INC NTLA 5910563 $ 385,427,813.23 1.65
ARKK KE HOLDINGS INC BEKE 6293124 $ 381,740,901.84 1.63
ARKK TWIST BIOSCIENCE CORP TWST 2888621 $ 378,929,302.78 1.62
ARKK IOVANCE BIOTHERAPEUTICS INC IOVA 11691695 $ 362,676,378.90 1.55
ARKK 10X GENOMICS INC-CLASS A TXG 2044237 $ 356,024,315.92 1.52
ARKK NINTENDO CO LTD-UNSPONS ADR NTDOY 4804540 $ 354,094,598.00 1.51
ARKK TENCENT HOLDINGS LTD-UNS ADR TCEHY 4269709 $ 345,547,549.37 1.48
ARKK PROTO LABS INC PRLB 2846444 $ 340,947,062.32 1.46
ARKK INTERCONTINENTAL EXCHANGE IN ICE 2706087 $ 302,134,613.55 1.29
ARKK PAYPAL HOLDINGS INC PYPL 1192781 $ 290,764,224.37 1.24
ARKK IRIDIUM COMMUNICATIONS INC IRDM 7642193 $ 288,798,473.47 1.23
ARKK PAGERDUTY INC PD 6913662 $ 287,954,022.30 1.23
ARKK 2U INC TWOU 7373827 $ 285,440,843.17 1.22
ARKK EDITAS MEDICINE INC EDIT 6092618 $ 280,747,837.44 1.2
ARKK SEA LTD-ADR SE 1193181 $ 258,490,731.84 1.1
ARKK PACCAR INC PCAR 2772515 $ 252,770,192.55 1.08
ARKK PALANTIR TECHNOLOGIES INC-A PLTR 10801821 $ 251,250,356.46 1.07
ARKK NOVARTIS AG-SPONSORED ADR NVS 2783362 $ 240,092,806.12 1.03
ARKK TWITTER INC TWTR 3712812 $ 238,622,427.24 1.02
ARKK LENDINGTREE INC TREE UW 1072084 $ 236,748,309.72 1.01
ARKK VERACYTE INC VCYT 4431875 $ 234,933,693.75 1
ARKK SYNOPSYS INC SNPS 948116 $ 222,930,515.08 0.95
ARKK PACIFIC BIOSCIENCES OF CALIF PACB 6643189 $ 216,966,552.74 0.93
ARKK MATERIALISE NV-ADR MTLS 5279754 $ 202,636,958.52 0.87
ARKK BEAM THERAPEUTICS INC BEAM 2309404 $ 204,082,031.48 0.87
ARKK REGENERON PHARMACEUTICALS REGN 431567 $ 202,732,913.92 0.87
ARKK FATE THERAPEUTICS INC FATE 2244692 $ 195,714,695.48 0.84
ARKK TERADYNE INC TER 1686180 $ 190,740,681.60 0.81
ARKK STRATASYS LTD SSYS 5927160 $ 152,742,913.20 0.65
ARKK SERES THERAPEUTICS INC MCRB 7357906 $ 150,542,756.76 0.64
ARKK HUYA INC-ADR HUYA 6297471 $ 140,811,451.56 0.6
ARKK NANOSTRING TECHNOLOGIES INC NSTG 1927033 $ 130,787,729.71 0.56
ARKK DRAFTKINGS INC – CL A DKNG 1766580 $ 123,218,955.00 0.53
ARKK BERKELEY LIGHTS INC BLI 2273703 $ 112,320,928.20 0.48
ARKK CERUS CORP CERS 17450344 $ 106,447,098.40 0.45
ARKK COMPUGEN LTD CGEN 9180979 $ 78,589,180.24 0.34
ARKK MORGAN STANLEY GOVT INSTL 8035 65058639.41 $ 65,058,639.41 0.28
ARKK SYROS PHARMACEUTICALS INC SYRS 4628591 $ 41,194,459.90 0.18
ARKK TAIWAN SEMICONDUCTOR-SP ADR TSM 56941 $ 6,541,951.49 0.03
ARKK ORGANOVO HOLDINGS INC ONVO 121593 $ 1,190,395.47 0.01


Fund Details

As of 12/31/2020
Ticker ARKK
Fund Type Active Equity ETF
CUSIP 00214Q 104
ISIN US00214Q1040
Primary Exchange NYSE Arca
Inception Date 10/31/2014
Net Assets $17.68 Billion
Expense Ratio 0.75%
Indicative Value ARKK.IV
Net Asset Value (NAV) ARKK.NV
Typical # of Holdings 35-55
Weighted Avg Market CAP $122 Billion
Median Market CAP $11 Billion
Portfolio Managers Catherine D. Wood

ARKK Performance

As of 12/31/2020
ARKK 3 Months YTD 1 Year* 3 Years* 5 Years* Since Inception*
NAV 37.44% 152.51% 152.51% 52.36% 45.40% 36.39%
Market Price 37.55% 152.83% 152.83% 52.34% 46.03% 36.42%
Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. The 
investment return and principal will fluctuate so that an investor’s shares when redeemed may be worth more or less than the original cost. The Fund’s most recent month-end performance can be found in the fund material section. Returns for less than one year are not annualized. Net asset value (“NAV”) returns are based on the dollar value of a single share of the ETF, calculated using the value of the underlying assets of the ETF minus its liabilities, divided by the number of shares outstanding. The NAV is typically calculated at 4:00 pm Eastern time on each business day the New York Stock Exchange is open for trading. Market returns are based on the trade price at which shares are bought and sold on the NYSE Arca, Inc. using the last share trade. Market performance does not represent the returns you would receive if you traded shares at other times. Total Return reflects the reinvestment of distributions on ex-date for NAV returns and payment date for Market Price returns. The market price of the ETF’s shares may differ significantly from their NAV during periods of market volatility.

Tesla divides believers and skeptics

Tesla divides believers and skeptics.

The market is split between believers and skeptics.

Those who believe that Tesla’s value is limitless and those who are more pessimistic about its prospects, especially given its current market price.

The company’s progress so far in “accelerating the world’s transition to sustainable energy” is a credit to Tesla. Still, there is a lot more left to do in its master plan to justify today’s valuation.

Tesla’s history of executing many of its audacious goals seems to be expected to continue, given the optimism in the current stock price. This gives the company very little room for error.


Investors Are Giving Tesla A Lot Of Credit For Future Execution

See the source image

Tesla (NASDAQ: TSLA) is easily one of the most controversial companies in the world right now. Most either love it or hate it. These two groups seem to be split into those who owned it through 2020 and those who watched on the sidelines as the price multiplied 10-fold.

What’s undeniable is that Tesla is working on some exciting innovations in the world’s transition to sustainable energy. The company’s grand ambitions for electric vehicles, autonomous driving, battery design, energy storage, and energy generation have contributed to the widely differing opinions on the business’ future. Some believe its plans are possible, while others are skeptical.

Let’s look at where Tesla is today versus its future expectations, plus what it needs to do to get there.

  • Tesla is in the early days of its ambitious plan.
  • Perfect execution is needed to reach its bold targets.
  • If any doubt arises about its ability to execute, the stock will re-rate downwards significantly.

Tesla Today Versus Tesla In The Future

Tesla currently generates revenue through 3 sources: automotive sales and leasing, energy generation and storage, and services.

The automotive business generated 97.2% of total revenue while energy generation and services contributed .7% combined during the 2020 financial year.

To understand the expectations related to Tesla’s future, we need to understand where the company is now versus where it is expected to be in, say, 10 years.

In 2020 Tesla did the following :

Production Deliveries
Model S/X 54,805 57,039
Model 3/Y 454,932 442,511
Total 509,737 499,550

In 2020, the company delivered half a million in vehicle sales and generated $27.23bn in revenue (sales and leasing combined). This is a 30% increase over 2019’s automotive revenue.

Years ago, in 2016, Tesla brought in $7 billion in total revenue, while in 2020, it brought in $31.54 billion while its earnings per share went from -.94 to now a positive .64, a 350% and 168% increase.

Sources: tesla.com

The company earns tradable regulatory credits because it operates under regulations related to zero-emission vehicles and clean fuel. It sells these credits to other carmakers who want to comply with the regulations and avoid fines because Tesla doesn’t need them. The CFO stated in an earnings call that demand for these credits would remain strong for the next few years. Still, as electric vehicles become more mainstream and other manufacturers also begin complying with the regulations through their own operations, earnings from these credits’ sales will decline.

Regarding future expectations for the automotive side, Tesla’s CEO, Elon Musk, stated the company plans to produce 20 million cars per year by 2030. That may sound audacious, and it is. But in 2014 (when it sold around 32k cars), Tesla said that it planned to sell 500k cars by 2020, which also seemed audacious, but it did it.

So to put that 20m into perspective, here are a few numbers. That means Tesla needs to increase its current production by 40x (a 44% CAGR). It needs to double what Volkswagen and Toyota (the two biggest carmakers currently) sold in 2020, which was 9.35 million and 9.5m cars, respectively. Plus, market forecasts from Deloitte and Bloomberg New Energy Finance’s likes expect the number of electric cars sold annually to be around 25m in the year 2030. So if true, this implies that Tesla would have an 80% share of the electric vehicle market in 2030, compared to its current 18% in 2020 (it was the market leader in 2020). Tesla is overly optimistic, or the industry forecasts underestimate electric vehicles’ total adoption in 10 years.

Considering that the company generated 43% YoY growth in cars produced from 2018 to 2020, it will need to continue expanding its production capabilities aggressively to continue this growth rate. Achieving this growth will rely heavily on three things: first, an improvement in the company’s capital efficiency (continual reduction in production costs), second, the successful creation of many new factories around the world to support production, and third, widespread adoption of Tesla’s Full Self-Driving (FSD) technology (if the software is successful). We will touch more on these points later.

Regarding Tesla’s energy generation and storage business, it deployed 3.02 Gigawatt hours of energy storage products and 205 megawatts of solar energy in 2020.

At Tesla’s recent Battery Day, Musk announced plans to get to 3 Terawatt hours (TWh) per year in batteries by 2030, a 1000x increase from its current installations.

Considering Bloomberg NEF predicts that energy storage installations around the world will reach 1.1TWh to 2.8TWh by the year 2040, it appears there are some big discrepancies. Tesla’s forecasted energy installations in 2030 would be more than 100% of what BloombergNEF forecasts for the entire world’s installations.

Again, either Tesla is optimistic, or industry forecasts are underestimating the growth of global battery installations.

How will Tesla Reach These Bold Targets?

These bold predictions from Tesla seem vastly different from what some market research by other firms suggests will occur. Regardless, to achieve what it’s claiming is possible, a few things need to occur.

1. Tesla Needs To Spend Big

To build more factories in its automotive and energy businesses, Tesla will need to spend money and lots of it. The company had $19.38bn of cash at the end of 2020 (after raising $10bn via equity in the second half of 2020, which was 2% dilutive), generated $5.9bn cash flow from operations, and spent $3.16bn of that on capital expenditures for the year. For 2021, 2022, and 2023, Tesla expects to spend between $4.5bn and $6bn on capital expenditures per year (page 33 of the 2020 annual report). Some forecasts suggest that Tesla will need somewhere between 20 to 40 new gigafactories to reach its goals by 2030, which could cost anywhere between $32bn and $64bn over the next 10 years (if we use the $1.6bn cost of the Shanghai factory). Yearly, that would equate to between $3.2bn and $6.4bn of capital expenditure over the next 10 years. Given the current cash flow from operations and the high cash balance, this seems affordable, at least for the next few years.

Here’s an outline of the company debt to equity situation since 2014 from our company report.

Source: Debt to Equity History and Analysis – Simply Wall St


2. Tesla’s FSD Software Needs to Win

Tesla FSD software is up against almost every other company in the space (e.g., Waymo, GM, Toyota), using LIDAR technology. It’s beyond my current capabilities to outline the technological differences between the two (and they are significant), but what is important to keep in mind is that neither are at full level 5 autonomy just yet. This means both systems are yet to prove they have the capabilities for full autonomy without a human driver.

However, while Tesla’s FSD software is reportedly only at level 2 autonomy, it claims it will be at level 5 (i.e., fully autonomous) by the end of 2021. This could be since it has accrued somewhere in the range of 3 billion miles of data from its fleet of cars on the road to building its FSD software. This is significantly more data than its competitors. So if that software comes to market successfully at the end of this year like the company plans, that would provide more substantial evidence that supports Tesla’s case for being the market leader in autonomous driving software and driving its potential exponential growth. Not only that, the software would provide a very high margin source of recurring revenue. But again, that’s yet to happen, and if it does experience any hiccups in the process, it could be incredibly damaging. So execution is key.

3. Tesla Needs To Continue Improving Capital Efficiency

In the manufacturing business, capital efficiency is key to growing production rapidly and affordably. Ark Invest, one of the most widely known bulls on Tesla (Ark owns around $3.7bn of Tesla across its ETFs), believes there is a 50/50 chance Tesla will be more capital efficient than traditional US auto-makers. The Bureau of Economic Analysis showed that traditional US automakers spent $14k per car on fixed assets in 2016. For reference, the Tesla Shanghai factory-required $1.6bn in financing with an initial capacity of 150,000 cars, meaning it costs $10,700 per car (Shanghai recently reached 8k cars per week and expects to produce 550k cars in 2021). To grow rapidly and affordably and enable this growth required to get to 20m cars by 2030, Tesla needs to continue to improve its efficiencies and productivity even further with its future factories.

The thing here is that it seems a lot of Tesla’s current market price is counting on the successful execution of these future events playing out. The CEO even noted this to employees in an internal letter in 2020. The expectations of exponential growth rely on simultaneously expanding production capabilities, increasing productivity, and successfully delivering FSD software to market. The company has a track record of executing, but if any doubt arises from investors about their ability to further execute, it would be incredibly damaging to the stock price.

What This Means For Investors

While Tesla seems to still be in the early days of its ambitious plans, the stock’s current market valuation seems to largely expect that all of these developments occur, even though they’re likely years away and not guaranteed. The huge share price increase in 2020 versus more conservative growth in the actual business indicates that a lot of the rise was due to increasing expectations that the company would successfully execute. As investors, we need to assess a range of possible future outcomes, assess the probability of each outcome occurring, and estimate the potential risk-reward that comes with each outcome playing out.

There’s a saying from Charlie Munger that goes, “No matter how wonderful a business is, it’s not worth an infinite price.” It’s up to us as investors to determine what an appropriate price is.

How to trade Tesla : 

On the overall 2hour, 360-day time frame, Tesla’s technical analysis reads bearish with more downside to come.

The 14-day simple moving average is now well below the 30-day simple moving average.

As a result, we now see more downside for tesla to come in the near future.

As a day trader and an option trader, we would be looking to buy $550 or $500 puts if this downward trend were to continue.

The price target will be $566.77 and then $533

Join our discord to see more real-time analysis.  


Tesla’s weight in SPDR S&P 500 ETF Trust, SPY, has led the stock market to retrace back down towards the $370 price level.

Price action has led to many stating that the stock market is crashing.

But to be honest, we have not seen a market crash yet.

Tiger Wolf Capital owner Frank Mercado wrote this article is general in nature. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.