Cathie Wood's ARK Invest added to its SpaceX holdings on Wednesday, purchasing 76,261 shares of the private space company. The buy came as the probability of a merger between Tesla and SpaceX reached 90%, according to market odds.
Why the purchase now
The timing of the acquisition lines up with surging speculation about a potential tie-up between Elon Musk's two most prominent ventures. ARK has been a longtime bull on both Tesla and SpaceX, often highlighting synergies between the companies in its research. With merger odds now at 90%, the move suggests Wood sees further upside in SpaceX shares ahead of any deal.
ARK's flagship Innovation ETF (ARKK) has held SpaceX for years, and this latest buy increases its exposure. The exact price paid per share was not disclosed, as SpaceX is private and trades infrequently on secondary markets. But the purchase of 76,261 shares represents a significant addition to ARK's position.
What the 90% odds mean
The 90% figure comes from prediction markets, where traders are betting heavily on a merger. While neither Tesla nor SpaceX has confirmed any plans, the high probability reflects growing investor conviction that a combination is inevitable. Some see a merger as a way to combine Tesla's automotive and battery expertise with SpaceX's space technology and Starlink satellite network.
For ARK, the purchase could be a bet that SpaceX's valuation will rise further if a merger is announced. SpaceX is currently valued at around $180 billion, making it one of the most valuable private companies in the world. A merger with Tesla, which has a market cap of over $500 billion, could create a combined entity worth trillions.
ARK's track record with SpaceX
Wood's firm has been a consistent buyer of SpaceX shares over the years, often adding to its position when secondary market opportunities arise. This latest purchase is in line with that pattern. ARK has also been a major holder of Tesla stock, and the two investments are central to its thesis that innovation will drive future growth.
The purchase on Wednesday comes as ARK's ETFs have seen inflows, giving the firm capital to deploy. It also follows a period of volatility in tech stocks, which may have created a buying opportunity in private markets.
What happens next depends on whether the merger speculation turns into reality. For now, ARK is doubling down on its bet that the two companies will become one.
