2/2 © Reuters. Tesla logo seen on a branch in Bern 2/2
By Thyagaraju Adinarayan LONDON (Reuters) – Cathie Wood’s Ark Invest funds bought an additional $ 171 million in Tesla (NASDAQ 🙂 shares on Tuesday, the fund group said on Wednesday, after shares in the electric car maker fell sharply and closed below $ 700 for the first time. this year. The $ 26.6 billion ARK Innovation exchange-traded fund (ETF), one of the best performing ETFs in 2020, fell sharply this week along with Tesla as momentum stocks fell sharply. Tesla shares represent approximately 10% of the fund. The sell-off sparked heavy trading, with $ 5 billion of ARK Innovation shares changing hands on Tuesday, more than double the volume from the previous session. The fund was trading slightly higher on Wednesday, but has lost 9% this week. Meanwhile, short interest in the fund’s shares showed a massive surge, with 100% of shares available to short currently on loan, data from FIS Astec Analytics showed. Short sellers often borrow and sell stocks that they hope to go down in value, hoping to buy them back at a lower price to pay off the loan and keep the difference. David Lewis of FIS Astec Analytics said his company’s data on borrowing costs suggests a possible purchase of the ETF as the price falls. According to the Ark Invest website, the Tesla stock purchases were carried out in three installments worth around $ 124 million, $ 39 million and $ 8 million. On the same day, Ark Invest funds also sold $ 126 million of Taiwan Semiconductor shares listed in the United States. Ark Invest now has a stake of more than 0.5% in Tesla with a weight of 6.6% in all of its funds. Shares of Tesla rose 2.6% in pre-market trading in the US on Wednesday after losing as much as 13.4% in the previous session, dragged down by heavy losses in, in which Elon’s company Musk recently invested $ 1.5 billion. The ARK Innovation fund has large positions in so-called momentum stocks, which tend to attract investors based on thematic trends rather than fundamentals or valuation.