Cathie Wood Makes $20M Bullish Bet On SpaceX Stock As Short Sellers Rake In $4B Profit

On Monday, Cathie Wood’s ARK Invest bought more than $20 million worth of SpaceX shares. The purchase is viewed as a “buy the dip” strategy as Elon Musk-led SpaceX stock continued its sharp run of losses after the IPO.

Cathie Wood Continues Buying SpaceX Stock At A Discount

Cathie Wood’s latest buy occurred as SpaceX stock closed at price of $119.85, down 3.34% on Monday, June 20. At this closing, then the total value of ARK’s combined purchases, based on the closing price, come to about $20.45 million. The stock has since recovered 1.88% to $122.10 in premarket trading Tuesday.

The ARK Innovation ETF (ARKK) had the largest buy of 97,664 SPCX shares. This stash represented approximately $11.70 million in total value of the purchase, according to ARK’s disclosure of daily trading activities. The ARK Autonomous Technology & Robotics ETF (ARKQ) bought 31,807 shares, representing an investment of about $3.81 million.

Further, the Cathie Wood’s ARK Next Generation Internet ETF (ARKW) raked in 28,153 shares with nearly $3.37 million in value. In addition, the ARK Space Exploration & Innovation ETF (ARKX) bought 13,010 SpaceX shares for close to $1.56 million.

SPCX Stock Grapples With Losses As Short Selling Surges

Cathie Wood’s latest purchase follows investor confidence in the new public company for the aerospace group remaining low. SPX has dropped over 45% since its IPO. It even erased almost $1 trillion in market cap in just a few weeks since its introduction to the market.

Moreover, tbe downturn has also brought the share price down from the IPO price of $135. This SpaceX stock crash put most investors in the public market at a loss.

The extended selling stretch has rewarded bearish investors with handsome returns. The financial data firm S3 Partners reports that over the last month, short sellers have made approximately $4 billion in paper profits. Investors who bet on further declines have reportedly taken out about 30% of the company’s shares, which is approximately 192 million free-floating ones.

Also, SpaceX’s first post-IPO trip with its Starship vehicle has been called off after an automatic abort due to engine problems. This event eventually led to an increase in selling pressure. Moreover, another important event in the in-road is also a lockup that is set to expire on August 19, which will unleash an additional 900 million shares for trading.

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