Cathie Wood’s ARK Invest Sells $146.2 Million in Circle Shares Amid 20.4% Gain

Cathie Wood’s ARK Invest sold $146.2 million worth of Circle (CRCL) shares on Friday, despite the stock surging nearly 250% since its June 5 debut on the New York Stock Exchange. The latest move saw ARK sell 609,175 shares across three of its funds, including ARK Innovation ETF (ARKK), ARK Next Generation Internet ETF (ARKW), and ARK Fintech Innovation ETF (ARKF). ARKK led the divestment with 490,549 shares sold, followed by ARKW and ARKF with 75,018 and 43,608 shares, respectively.

Friday’s sale coincided with a 20.4% gain in CRCL, closing at $240.30, a dramatic jump from its $69 opening price earlier this month. The transaction marked ARK’s third Circle sale within the week, bringing the total offloaded shares to 1.25 million and grossing roughly $243 million. Despite the aggressive trimming, ARK still holds a sizable stake in Circle. As of June 20, it remains the company’s eighth-largest shareholder with approximately $750 million in CRCL holdings. Notably, CRCL is now the top holding in the ARKW fund, representing 7.8% of its portfolio.

The largest Circle holder remains IDG-Accel China Capital Fund II with 23.3 million shares, followed by General Catalyst and James Breyer. Notably, ARK is the only major Circle investor to significantly reduce exposure post-IPO. Other backers, including BlackRock, reportedly eyeing a 10% stake in the company, have not disclosed any sales. Executives at Circle, however, have sold portions of their holdings. CEO Jeremy Allaire, co-founder Sean Neville, and CFO Jeremy Fox-Geen were listed in the prospectus as planning to sell 8%, 11%, and 11% of their holdings, respectively.

ARK Invest’s decision to sell a significant portion of its Circle shares amid the stock’s rally raises questions about the firm’s investment strategy. The sale could be seen as a move to lock in profits or reallocate capital to other opportunities. However, it is also possible that ARK has concerns about the sustainability of Circle’s recent gains or the company’s long-term prospects. The fact that ARK remains Circle’s eighth-largest shareholder suggests that the firm still has confidence in the company, but the reduction in exposure indicates a degree of caution.

Other major investors in Circle, such as BlackRock, have not followed ARK’s lead in reducing their holdings. This could indicate that these investors have a different view of Circle’s prospects or are more willing to take on the risk associated with the stock’s volatility. The fact that Circle’s executives have also sold portions of their holdings could be seen as a sign of confidence in the company’s future, as they are likely to have a better understanding of its prospects than outside investors.

In summary, ARK Invest’s sale of $146.2 million worth of Circle shares amid the stock’s rally is a significant development that could have implications for the company’s future. The sale could be seen as a move to lock in profits or reallocate capital, but it could also indicate concerns about the sustainability of Circle’s recent gains or the company’s long-term prospects. The fact that other major investors have not followed ARK’s lead in reducing their holdings suggests that there may be differing views of Circle’s prospects among investors. The sale of portions of their holdings by Circle’s executives could be seen as a sign of confidence in the company’s future, but it is also possible that they are taking advantage of the stock’s recent rally to realize gains.