Cathie Wood’s ARK Funds Offload Most JD.com Shares Since July
(Bloomberg) -- Cathie Wood amped up selling of JD.com Inc. shares amid Tencent Holdings Ltd.’s move to pare investment in the tech industry and as a spike in U.S. Treasury yields sparked a rotation out of the expensive sector globally.
ARK Investment Management, Wood’s firm, sold 883,684 American depository receipts of JD.com on Monday to mark its biggest reduction in the company since July, according to ARK’s trading data compiled by Bloomberg. The asset manager has been cutting holdings in the Chinese online retailer since mid-September and now has about 2.4 million shares, a 0.18% stake.
Wood’s ARK Autonomous Technology & Robotics ETF sold 616,090 ADRs of JD while ARK Fintech Innovation ETF divested 267,594 shares, according to the asset manager’s daily trading updates. That equates to stakes worth $61.5 million at Monday’s closing price.
Wood’s cuts in JD come after tech-bellwether Tencent recently pared its holdings in companies it backs to assuage Beijing’s regulatory concerns -- a move that deepened a selloff in a sector from which traders had already been exiting due to a spike in U.S. Treasury yields.
The move is feeding expectations that some peers may follow its playbook. Tencent planned to distribute more than $16 billion of JD’s shares as a one-time dividend. The tech giant also cut its stake in Singapore’s Sea Ltd. last week.
JD was among the first companies that Wood bought last year after earlier dumping Chinese technology stocks. ARK’s current selling comes even as other investors see a peak in Beijing’s regulatory crackdown and a bottom in its battered stocks.
ADRs of the e-commerce operator are down by a third from a peak in March largely due to China’s sweeping regulatory crackdown on the industry aimed at pursuing President Xi Jinping’s goal of “common prosperity.” JD and some cohorts have boosted buyback plans after last year’s plunge.
Read: JD.Com Target Cut at Citi on Challenging Macro, Pandemic Impact
Wood and her firm frequently say that their investment horizon is at least five-years, and acknowledge that the disruptive companies they target are often volatile. The daily trading updates from ARK show only active decisions by the management team and do not include creation or redemption activity caused by investor flows.
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