ARK Invest, the asset manager led by Cathie Wood, bought more than $20 million worth of SpaceX shares on Monday. The purchase comes as the company's stock continues to slide after its initial public offering, with short sellers pocketing billions.
A bet on a rebound
The move is widely seen as a 'buy the dip' strategy. SpaceX shares have been in a sharp run of losses since the IPO, creating an opening for investors willing to bet on a recovery. ARK's latest buy adds to its already sizable position in the space exploration firm.
Short sellers profit $4 billion
While ARK Invest was buying, short sellers were cashing in. They've raked in $4 billion in profits as SpaceX stock declined. The divergence between long-term believers and short-term traders is stark.
What's behind the sell-off?
The facts don't specify why SpaceX shares have fallen so sharply after the IPO. But the losses have been consistent enough to attract heavy short interest. ARK's purchase suggests the firm sees the current price as a discount worth taking.
Whether the dip will deepen or reverse is unclear. ARK's bet is that the company's long-term prospects outweigh the post-IPO turbulence.
