Hostile Takeover of ARK Investment Management?

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fingoals
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Hostile Takeover of ARK Investment Management?

Post by fingoals »

What do you think about this news? Is it still safe to invest or remain invested in ARK funds, considering the situation?

P.S. I'm very surprised that Cathie Wood has allowed such a terrible option to be included in the original contract. Why would you do this to your company?
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midareff
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Re: Hostile Takeover of ARK Investment Management?

Post by midareff »

fingoals wrote: Sat Nov 14, 2020 7:03 am What do you think about this news? Is it still safe to invest or remain invested in ARK funds, considering the situation?

P.S. I'm very surprised that Cathie Wood has allowed such a terrible option to be included in the original contract. Why would you do this to your company?
I think it is financial porn I could not care less about.
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fingoals
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Re: Hostile Takeover of ARK Investment Management?

Post by fingoals »

midareff wrote: Sat Nov 14, 2020 7:34 am
fingoals wrote: Sat Nov 14, 2020 7:03 am What do you think about this news? Is it still safe to invest or remain invested in ARK funds, considering the situation?

P.S. I'm very surprised that Cathie Wood has allowed such a terrible option to be included in the original contract. Why would you do this to your company?
I think it is financial porn I could not care less about.
You think fuzzy situation around control of an investment firm with popular funds and $16B+ assets under management is "financial porn"? Hmm ...
Keenobserver
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Re: Hostile Takeover of ARK Investment Management?

Post by Keenobserver »

Not sure what exactly will change. If you know the specifics of the change, then may not be " financial porn
aristotelian
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Re: Hostile Takeover of ARK Investment Management?

Post by aristotelian »

midareff wrote: Sat Nov 14, 2020 7:34 am
fingoals wrote: Sat Nov 14, 2020 7:03 am What do you think about this news? Is it still safe to invest or remain invested in ARK funds, considering the situation?

P.S. I'm very surprised that Cathie Wood has allowed such a terrible option to be included in the original contract. Why would you do this to your company?
I think it is financial porn I could not care less about.
I'm guessing you are not an ARK Funds owner. If you were, you might feel differently.
fsh71
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Re: Hostile Takeover of ARK Investment Management?

Post by fsh71 »

idiosyncratic risk
TheoLeo
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Re: Hostile Takeover of ARK Investment Management?

Post by TheoLeo »

If you believe in the companies your ETF is invested in, then I don´t see the risk. Worst case, which I don´t think is likely, Cathy Wood takes her team some place else, everyone wants to sell the ETFs and nobody wants to buy. In this case, a market maker would buy your ETF and redeem it in return for the actual company stock your ETF holds. Then, you take your money and simply buy the new ETF from Cathy Wood. So if someone is at risk, its Resolute...
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midareff
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Re: Hostile Takeover of ARK Investment Management?

Post by midareff »

fingoals wrote: Sat Nov 14, 2020 7:51 am
midareff wrote: Sat Nov 14, 2020 7:34 am
fingoals wrote: Sat Nov 14, 2020 7:03 am What do you think about this news? Is it still safe to invest or remain invested in ARK funds, considering the situation?

P.S. I'm very surprised that Cathie Wood has allowed such a terrible option to be included in the original contract. Why would you do this to your company?
I think it is financial porn I could not care less about.
You think fuzzy situation around control of an investment firm with popular funds and $16B+ assets under management is "financial porn"? Hmm ...
I think investing in the firm's funds in the first place was susceptibility to financial porn, sector investing and other speculative ills. ... hence a "fuzzy situation around control of an investment firm with popular funds and $16B+ assets under management". Picking a fund that targets disruptive companies is no different than picking a fund that targets tech or healthcare.
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midareff
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Re: Hostile Takeover of ARK Investment Management?

Post by midareff »

aristotelian wrote: Sat Nov 14, 2020 8:28 am
midareff wrote: Sat Nov 14, 2020 7:34 am
fingoals wrote: Sat Nov 14, 2020 7:03 am What do you think about this news? Is it still safe to invest or remain invested in ARK funds, considering the situation?

P.S. I'm very surprised that Cathie Wood has allowed such a terrible option to be included in the original contract. Why would you do this to your company?
I think it is financial porn I could not care less about.
I'm guessing you are not an ARK Funds owner. If you were, you might feel differently.
I feel just fine about my Vanguard and Fidelity Funds.
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fingoals
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Re: Hostile Takeover of ARK Investment Management?

Post by fingoals »

Thank you to all who kindly shared (and will share) their thoughts on this. Now I'm feeling a bit better. Full disclaimer: I have bought a small number of shares of several ARK ETFs just a day before my original post, hence my slightly higher than average interest in the subject.
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firebirdparts
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Re: Hostile Takeover of ARK Investment Management?

Post by firebirdparts »

If they can purchase a controlling stake by contract, who do they purchase it from? If it’s to be issued, then they’ll not have to worry about where the money went.
A fool and your money are soon partners
langlands
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Re: Hostile Takeover of ARK Investment Management?

Post by langlands »

fingoals wrote: Sat Nov 14, 2020 5:56 pm Thank you to all who kindly shared (and will share) their thoughts on this. Now I'm feeling a bit better. Full disclaimer: I have bought a small number of shares of several ARK ETFs just a day before my original post, hence my slightly higher than average interest in the subject.
I'm confused why you're feeling better? The entire thread so far has consisted of one poster expressing indifference towards the topic and others arguing that perhaps the topic is worth discussing. Has any new information or perspectives been shared? (I see now that TheoLeo has shared his perspective, which is not particularly optimistic.)

Unfortunately, I know no more than anyone else and have nothing pertinent to share.

I will say that I'm confident ARK cannot trade significantly below NAV (at most on the ball park of 0.1-0.3% I'd say) because their positions are public and updated daily, so arbitraging with the underlying shares would be easy by market makers.
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Re: Hostile Takeover of ARK Investment Management?

Post by fingoals »

langlands wrote: Sat Nov 14, 2020 6:44 pm
fingoals wrote: Sat Nov 14, 2020 5:56 pm Thank you to all who kindly shared (and will share) their thoughts on this. Now I'm feeling a bit better. Full disclaimer: I have bought a small number of shares of several ARK ETFs just a day before my original post, hence my slightly higher than average interest in the subject.
I'm confused why you're feeling better? The entire thread so far has consisted of one poster expressing indifference towards the topic and others arguing that perhaps the topic is worth discussing. Has any new information or perspectives been shared? (I see now that TheoLeo has shared his perspective, which is not particularly optimistic.)

Unfortunately, I know no more than anyone else and have nothing pertinent to share.

I will say that I'm confident ARK cannot trade significantly below NAV (at most on the ball park of 0.1-0.3% I'd say) because their positions are public and updated daily, so arbitraging with the underlying shares would be easy by market makers.
I said that now I'm feeling a bit better. And it is based on the sentiment expressed in TheoLeo's comment, which, to me, appeared as positive rather than negative ("If you believe in the companies your ETF is invested in, then I don´t see the risk ... So if someone is at risk, its Resolute").

Regarding your arbitraging point above, could you clarify / educate me on this? I don't see how "market makers" arbitraging with the underlying shares (and even considering their arguably slightly/somewhat better performance) could significantly or at all affect "small fish" investors like me.
langlands
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Re: Hostile Takeover of ARK Investment Management?

Post by langlands »

fingoals wrote: Sat Nov 14, 2020 7:26 pm
langlands wrote: Sat Nov 14, 2020 6:44 pm
fingoals wrote: Sat Nov 14, 2020 5:56 pm Thank you to all who kindly shared (and will share) their thoughts on this. Now I'm feeling a bit better. Full disclaimer: I have bought a small number of shares of several ARK ETFs just a day before my original post, hence my slightly higher than average interest in the subject.
I'm confused why you're feeling better? The entire thread so far has consisted of one poster expressing indifference towards the topic and others arguing that perhaps the topic is worth discussing. Has any new information or perspectives been shared? (I see now that TheoLeo has shared his perspective, which is not particularly optimistic.)

Unfortunately, I know no more than anyone else and have nothing pertinent to share.

I will say that I'm confident ARK cannot trade significantly below NAV (at most on the ball park of 0.1-0.3% I'd say) because their positions are public and updated daily, so arbitraging with the underlying shares would be easy by market makers.
I said that now I'm feeling a bit better. And it is based on the sentiment expressed in TheoLeo's comment, which, to me, appeared as positive rather than negative ("If you believe in the companies your ETF is invested in, then I don´t see the risk ... So if someone is at risk, its Resolute").

Regarding your arbitraging point above, could you clarify / educate me on this? I don't see how "market makers" arbitraging with the underlying shares (and even considering their arguably slightly/somewhat better performance) could significantly or at all affect "small fish" investors like me.
Well, what I imagine is that large institutions who are authorized participants will buy ARK ETF shares on the secondary market that are significantly underpriced and redeem them for the underlying securities that the ETF holds. They will then sell those securities and make a tidy profit. It is this arbitrage mechanism that keeps the ETF NAV from deviating from the value of the underlying holdings in the first place.
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fingoals
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Re: Hostile Takeover of ARK Investment Management?

Post by fingoals »

langlands wrote: Sun Nov 15, 2020 6:26 pm
fingoals wrote: Sat Nov 14, 2020 7:26 pm
langlands wrote: Sat Nov 14, 2020 6:44 pm
fingoals wrote: Sat Nov 14, 2020 5:56 pm Thank you to all who kindly shared (and will share) their thoughts on this. Now I'm feeling a bit better. Full disclaimer: I have bought a small number of shares of several ARK ETFs just a day before my original post, hence my slightly higher than average interest in the subject.
I'm confused why you're feeling better? The entire thread so far has consisted of one poster expressing indifference towards the topic and others arguing that perhaps the topic is worth discussing. Has any new information or perspectives been shared? (I see now that TheoLeo has shared his perspective, which is not particularly optimistic.)

Unfortunately, I know no more than anyone else and have nothing pertinent to share.

I will say that I'm confident ARK cannot trade significantly below NAV (at most on the ball park of 0.1-0.3% I'd say) because their positions are public and updated daily, so arbitraging with the underlying shares would be easy by market makers.
I said that now I'm feeling a bit better. And it is based on the sentiment expressed in TheoLeo's comment, which, to me, appeared as positive rather than negative ("If you believe in the companies your ETF is invested in, then I don´t see the risk ... So if someone is at risk, its Resolute").

Regarding your arbitraging point above, could you clarify / educate me on this? I don't see how "market makers" arbitraging with the underlying shares (and even considering their arguably slightly/somewhat better performance) could significantly or at all affect "small fish" investors like me.
Well, what I imagine is that large institutions who are authorized participants will buy ARK ETF shares on the secondary market that are significantly underpriced and redeem them for the underlying securities that the ETF holds. They will then sell those securities and make a tidy profit. It is this arbitrage mechanism that keeps the ETF NAV from deviating from the value of the underlying holdings in the first place.
Thank you very much for the explanation. But why ARK ETF shares would be "significantly underpriced" on the secondary market?
langlands
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Re: Hostile Takeover of ARK Investment Management?

Post by langlands »

fingoals wrote: Sun Nov 15, 2020 6:31 pm
langlands wrote: Sun Nov 15, 2020 6:26 pm
fingoals wrote: Sat Nov 14, 2020 7:26 pm
langlands wrote: Sat Nov 14, 2020 6:44 pm
fingoals wrote: Sat Nov 14, 2020 5:56 pm Thank you to all who kindly shared (and will share) their thoughts on this. Now I'm feeling a bit better. Full disclaimer: I have bought a small number of shares of several ARK ETFs just a day before my original post, hence my slightly higher than average interest in the subject.
I'm confused why you're feeling better? The entire thread so far has consisted of one poster expressing indifference towards the topic and others arguing that perhaps the topic is worth discussing. Has any new information or perspectives been shared? (I see now that TheoLeo has shared his perspective, which is not particularly optimistic.)

Unfortunately, I know no more than anyone else and have nothing pertinent to share.

I will say that I'm confident ARK cannot trade significantly below NAV (at most on the ball park of 0.1-0.3% I'd say) because their positions are public and updated daily, so arbitraging with the underlying shares would be easy by market makers.
I said that now I'm feeling a bit better. And it is based on the sentiment expressed in TheoLeo's comment, which, to me, appeared as positive rather than negative ("If you believe in the companies your ETF is invested in, then I don´t see the risk ... So if someone is at risk, its Resolute").

Regarding your arbitraging point above, could you clarify / educate me on this? I don't see how "market makers" arbitraging with the underlying shares (and even considering their arguably slightly/somewhat better performance) could significantly or at all affect "small fish" investors like me.
Well, what I imagine is that large institutions who are authorized participants will buy ARK ETF shares on the secondary market that are significantly underpriced and redeem them for the underlying securities that the ETF holds. They will then sell those securities and make a tidy profit. It is this arbitrage mechanism that keeps the ETF NAV from deviating from the value of the underlying holdings in the first place.
Thank you very much for the explanation. But why ARK ETF shares would be "significantly underpriced" on the secondary market?
I thought the entire fear was that this hostile takeover news would result in a sharp drop in ARKK on Monday? Maybe I misunderstood your OP.
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fingoals
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Re: Hostile Takeover of ARK Investment Management?

Post by fingoals »

langlands wrote: Sun Nov 15, 2020 7:02 pm
fingoals wrote: Sun Nov 15, 2020 6:31 pm
langlands wrote: Sun Nov 15, 2020 6:26 pm
fingoals wrote: Sat Nov 14, 2020 7:26 pm
langlands wrote: Sat Nov 14, 2020 6:44 pm

I'm confused why you're feeling better? The entire thread so far has consisted of one poster expressing indifference towards the topic and others arguing that perhaps the topic is worth discussing. Has any new information or perspectives been shared? (I see now that TheoLeo has shared his perspective, which is not particularly optimistic.)

Unfortunately, I know no more than anyone else and have nothing pertinent to share.

I will say that I'm confident ARK cannot trade significantly below NAV (at most on the ball park of 0.1-0.3% I'd say) because their positions are public and updated daily, so arbitraging with the underlying shares would be easy by market makers.
I said that now I'm feeling a bit better. And it is based on the sentiment expressed in TheoLeo's comment, which, to me, appeared as positive rather than negative ("If you believe in the companies your ETF is invested in, then I don´t see the risk ... So if someone is at risk, its Resolute").

Regarding your arbitraging point above, could you clarify / educate me on this? I don't see how "market makers" arbitraging with the underlying shares (and even considering their arguably slightly/somewhat better performance) could significantly or at all affect "small fish" investors like me.
Well, what I imagine is that large institutions who are authorized participants will buy ARK ETF shares on the secondary market that are significantly underpriced and redeem them for the underlying securities that the ETF holds. They will then sell those securities and make a tidy profit. It is this arbitrage mechanism that keeps the ETF NAV from deviating from the value of the underlying holdings in the first place.
Thank you very much for the explanation. But why ARK ETF shares would be "significantly underpriced" on the secondary market?
I thought the entire fear was that this hostile takeover news would result in a sharp drop in ARKK on Monday? Maybe I misunderstood your OP.
True. It was my main fear (in addition to the fear of potential liquidity issues). But I think that now I understand what you meant - by only mentioning the secondary market (as opposed to both public and secondary markets), you wanted to emphasize that it's only authorized participants who could access the underlying securities and, thus, only those players could profit from a potential drop in NAV? Did I get it right?
langlands
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Re: Hostile Takeover of ARK Investment Management?

Post by langlands »

fingoals wrote: Sun Nov 15, 2020 7:29 pm
langlands wrote: Sun Nov 15, 2020 7:02 pm
fingoals wrote: Sun Nov 15, 2020 6:31 pm
langlands wrote: Sun Nov 15, 2020 6:26 pm
fingoals wrote: Sat Nov 14, 2020 7:26 pm

I said that now I'm feeling a bit better. And it is based on the sentiment expressed in TheoLeo's comment, which, to me, appeared as positive rather than negative ("If you believe in the companies your ETF is invested in, then I don´t see the risk ... So if someone is at risk, its Resolute").

Regarding your arbitraging point above, could you clarify / educate me on this? I don't see how "market makers" arbitraging with the underlying shares (and even considering their arguably slightly/somewhat better performance) could significantly or at all affect "small fish" investors like me.
Well, what I imagine is that large institutions who are authorized participants will buy ARK ETF shares on the secondary market that are significantly underpriced and redeem them for the underlying securities that the ETF holds. They will then sell those securities and make a tidy profit. It is this arbitrage mechanism that keeps the ETF NAV from deviating from the value of the underlying holdings in the first place.
Thank you very much for the explanation. But why ARK ETF shares would be "significantly underpriced" on the secondary market?
I thought the entire fear was that this hostile takeover news would result in a sharp drop in ARKK on Monday? Maybe I misunderstood your OP.
True. It was my main fear (in addition to the fear of potential liquidity issues). But I think that now I understand what you meant - by only mentioning the secondary market (as opposed to both public and secondary markets), you wanted to emphasize that it's only authorized participants who could access the underlying securities and, thus, only those players could profit from a potential drop in NAV? Did I get it right?
The secondary market and public markets are the same thing- it just refers to what we commonly know as the stock market. "Primary market" is IPO offering when the stock shares are first issued.

Yes, only authorized participants (as far as I can tell) can profit from the potential NAV drop, but not because they can access the underlying securities. The "underlying securities" I'm referring to here are just TSLA, SQ, and other stocks that ARKK holds. Anyone can go into their brokerage account and buy these. What's special about authorized participants is that they can create and redeem ETF shares.

Let me describe the arbitrage mechanism explicitly. Say on Monday ARKK ETF is trading for $90 per share, but the combined value of all its holdings is actually $100 per share. The authorized participant buys a share of ARKK for $90. He then redeems it for 0.10 shares of TSLA, 0.05 shares of SQ, etc. (all the other holdings in ARKK) that are in total worth $100. He sells all these holdings and makes a tidy $10 profit.
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fingoals
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Re: Hostile Takeover of ARK Investment Management?

Post by fingoals »

langlands wrote: Sun Nov 15, 2020 7:58 pm
fingoals wrote: Sun Nov 15, 2020 7:29 pm
langlands wrote: Sun Nov 15, 2020 7:02 pm
fingoals wrote: Sun Nov 15, 2020 6:31 pm
langlands wrote: Sun Nov 15, 2020 6:26 pm

Well, what I imagine is that large institutions who are authorized participants will buy ARK ETF shares on the secondary market that are significantly underpriced and redeem them for the underlying securities that the ETF holds. They will then sell those securities and make a tidy profit. It is this arbitrage mechanism that keeps the ETF NAV from deviating from the value of the underlying holdings in the first place.
Thank you very much for the explanation. But why ARK ETF shares would be "significantly underpriced" on the secondary market?
I thought the entire fear was that this hostile takeover news would result in a sharp drop in ARKK on Monday? Maybe I misunderstood your OP.
True. It was my main fear (in addition to the fear of potential liquidity issues). But I think that now I understand what you meant - by only mentioning the secondary market (as opposed to both public and secondary markets), you wanted to emphasize that it's only authorized participants who could access the underlying securities and, thus, only those players could profit from a potential drop in NAV? Did I get it right?
The secondary market and public markets are the same thing- it just refers to what we commonly know as the stock market. "Primary market" is IPO offering when the stock shares are first issued.

Yes, only authorized participants (as far as I can tell) can profit from the potential NAV drop, but not because they can access the underlying securities. The "underlying securities" I'm referring to here are just TSLA, SQ, and other stocks that ARKK holds. Anyone can go into their brokerage account and buy these. What's special about authorized participants is that they can create and redeem ETF shares.

Let me describe the arbitrage mechanism explicitly. Say on Monday ARKK ETF is trading for $90 per share, but the combined value of all its holdings is actually $100 per share. The authorized participant buys a share of ARKK for $90. He then redeems it for 0.10 shares of TSLA, 0.05 shares of SQ, etc. (all the other holdings in ARKK) that are in total worth $100. He sells all these holdings and makes a tidy $10 profit.
Much appreciate your extra clarifications. How could someone not love this forum? There is so much wisdom here and so many 8-) people willing to help.

Re: arbitrage opportunity - yes, that's exactly how I understood it from your previous comment. But it is good to have a confirmation. Re: primary vs. secondary market - Hmm ... I thought that, in this context, "secondary market" refers to some kind of analogue of the private stock secondary market, but for authorized participants. Apparently, I was wrong.
000
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Re: Hostile Takeover of ARK Investment Management?

Post by 000 »

I wouldn't be too worried about this... unless I were Cathie Wood or another member (shareholder) of ARK Investment Management LLC itself.

The big risk is that the new owner forces the funds to be managed other than how Cathie Wood and her team would. So if I were to own any ARK funds I would be paying attention for that happening, just like a manager leaving any other active fund. And if that happens, it will be disappointing to ARK fund investors, but there are many disappointments in investing... especially active investing.
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fingoals
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Re: Hostile Takeover of ARK Investment Management?

Post by fingoals »

000 wrote: Sun Nov 15, 2020 8:29 pm I wouldn't be too worried about this... unless I were Cathie Wood or another member (shareholder) of ARK Investment Management LLC itself.

The big risk is that the new owner forces the funds to be managed other than how Cathie Wood and her team would. So if I were to own any ARK funds I would be paying attention for that happening, just like a manager leaving any other active fund. And if that happens, it will be disappointing to ARK fund investors, but there are many disappointments in investing... especially active investing.
Thank you for sharing your thoughts. As I said above, I do own a very small number of shares of some ARK funds now and, thus, will be following the story. Hopefully, nothing too dramatic will happen or, if things will look bad, at least, there will be enough time for shareholders to divest from troubled assets.
000
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Re: Hostile Takeover of ARK Investment Management?

Post by 000 »

fingoals wrote: Sun Nov 15, 2020 9:29 pm
000 wrote: Sun Nov 15, 2020 8:29 pm I wouldn't be too worried about this... unless I were Cathie Wood or another member (shareholder) of ARK Investment Management LLC itself.

The big risk is that the new owner forces the funds to be managed other than how Cathie Wood and her team would. So if I were to own any ARK funds I would be paying attention for that happening, just like a manager leaving any other active fund. And if that happens, it will be disappointing to ARK fund investors, but there are many disappointments in investing... especially active investing.
Thank you for sharing your thoughts. As I said above, I do own a very small number of shares of some ARK funds now and, thus, will be following the story. Hopefully, nothing too dramatic will happen or, if things will look bad, at least, there will be enough time for shareholders to divest from troubled assets.
I doubt any ARK fund will turn into a "troubled asset". That would be something like "Washington Mutual Bank / Debt not acquired by JPMorgan" or "Lehman Brothers Holdings E-Capital Trust I" valued at 1/100th of 1% of its face amount. :D Sort from lowest market value to see an example.

I assume all the ARK ETFs are 1940 Act funds, so I don't see there being a risk of substantial loss of principal due to a potential takeover or change in management. The most "catastrophic" risk these funds are likely to face are their high flying stocks (e.g. TSLA) taking a bloodbath and never recovering in share price, but presumably those holding them want exposure to those kind of stocks anyway.
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fingoals
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Re: Hostile Takeover of ARK Investment Management?

Post by fingoals »

000 wrote: Sun Nov 15, 2020 9:39 pm
fingoals wrote: Sun Nov 15, 2020 9:29 pm
000 wrote: Sun Nov 15, 2020 8:29 pm I wouldn't be too worried about this... unless I were Cathie Wood or another member (shareholder) of ARK Investment Management LLC itself.

The big risk is that the new owner forces the funds to be managed other than how Cathie Wood and her team would. So if I were to own any ARK funds I would be paying attention for that happening, just like a manager leaving any other active fund. And if that happens, it will be disappointing to ARK fund investors, but there are many disappointments in investing... especially active investing.
Thank you for sharing your thoughts. As I said above, I do own a very small number of shares of some ARK funds now and, thus, will be following the story. Hopefully, nothing too dramatic will happen or, if things will look bad, at least, there will be enough time for shareholders to divest from troubled assets.
I doubt any ARK fund will turn into a "troubled asset". That would be something like "Washington Mutual Bank / Debt not acquired by JPMorgan" or "Lehman Brothers Holdings E-Capital Trust I" valued at 1/100th of 1% of its face amount. :D Sort from lowest market value to see an example.

I assume all the ARK ETFs are 1940 Act funds, so I don't see there being a risk of substantial loss of principal due to a potential takeover or change in management. The most "catastrophic" risk these funds are likely to face are their high flying stocks (e.g. TSLA) taking a bloodbath and never recovering in share price, but presumably those holding them want exposure to those kind of stocks anyway.
That's good news, I appreciate your insights. Precisely because of Tesla being widely considered dramatically overvalued, I have skipped investing in ARKK & ARKW and only invested in ARKG, ARKF and ARKQ, which lack TSLA exposure and represent sectors, which, I believe, will be outperforming the market in observable future. Another reason for my investment in these three ARK funds is a hope that their modest-to-mid growth in the near term (plus one decent e-commerce mid-growth stock) will dampen or even balance out potential short-term downside from my several investments in :twisted: high-growth / high-risk stocks. I will see if this strategy works pretty soon, keeping my fingers crossed ... ;-)
occambogle
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Re: Hostile Takeover of ARK Investment Management?

Post by occambogle »

fingoals wrote: Sun Nov 15, 2020 10:37 pm That's good news, I appreciate your insights. Precisely because of Tesla being widely considered dramatically overvalued, I have skipped investing in ARKK & ARKW and only invested in ARKG, ARKF and ARKQ, which lack TSLA exposure and represent sectors.....
ARKQ is around 10% Tesla. Just pointing that out.....
https://ark-funds.com/arkq#holdings
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fingoals
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Re: Hostile Takeover of ARK Investment Management?

Post by fingoals »

occambogle wrote: Mon Nov 16, 2020 12:00 am
fingoals wrote: Sun Nov 15, 2020 10:37 pm That's good news, I appreciate your insights. Precisely because of Tesla being widely considered dramatically overvalued, I have skipped investing in ARKK & ARKW and only invested in ARKG, ARKF and ARKQ, which lack TSLA exposure and represent sectors.....
ARKQ is around 10% Tesla. Just pointing that out.....
https://ark-funds.com/arkq#holdings
Oops, my bad. Good catch, thank you for pointing that out. I guess, I was too focused on two other funds and somehow missed Tesla exposure in ARKQ. Well, then, anyway, if my math serves me right, that results in overall TSLA exposure across all three funds of 1.8%. Not a significant risk, I believe. :-)
occambogle
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Re: Hostile Takeover of ARK Investment Management?

Post by occambogle »

fingoals wrote: Mon Nov 16, 2020 12:36 am Oops, my bad. Good catch, thank you for pointing that out. I guess, I was too focused on two other funds and somehow missed Tesla exposure in ARKQ. Well, then, anyway, if my math serves me right, that results in overall TSLA exposure across all three funds of 1.8%. Not a significant risk, I believe. :-)
No worries. Checking you've also seen this thread: viewtopic.php?f=10&t=324463
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fingoals
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Re: Hostile Takeover of ARK Investment Management?

Post by fingoals »

occambogle wrote: Mon Nov 16, 2020 1:10 am
fingoals wrote: Mon Nov 16, 2020 12:36 am Oops, my bad. Good catch, thank you for pointing that out. I guess, I was too focused on two other funds and somehow missed Tesla exposure in ARKQ. Well, then, anyway, if my math serves me right, that results in overall TSLA exposure across all three funds of 1.8%. Not a significant risk, I believe. :-)
No worries. Checking you've also seen this thread: viewtopic.php?f=10&t=324463
Thank you for pointing to that ARK thread. Haven't seen it before, will definitely read and follow. :beer
Carol88888
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Re: Hostile Takeover of ARK Investment Management?

Post by Carol88888 »

There aren't a lot of facts but I don't like the sound of it because I cannot image the minority stake holder won't demand some kind of added compensation and that might raise expenses for investors.

Personally, having seen loads of hot funds come and go - usually internet and tech related - during the 90s, I cannot get excited by these offerings.
I lost a lot of money chasing Wagonner into some hot emerging growth fund. No need to do it again.

Anyway, if you want juicer returns (maybe) - there are plenty of offerings at Vanguard.(VGT, VHT etc) And you won't ever have to wake up to news that these funds have been sold to some outsider who wants a larger slice of the profits.
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fingoals
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Re: Hostile Takeover of ARK Investment Management?

Post by fingoals »

Carol88888 wrote: Mon Nov 16, 2020 4:24 pm There aren't a lot of facts but I don't like the sound of it because I cannot image the minority stake holder won't demand some kind of added compensation and that might raise expenses for investors.

Personally, having seen loads of hot funds come and go - usually internet and tech related - during the 90s, I cannot get excited by these offerings.
I lost a lot of money chasing Wagonner into some hot emerging growth fund. No need to do it again.

Anyway, if you want juicer returns (maybe) - there are plenty of offerings at Vanguard.(VGT, VHT etc) And you won't ever have to wake up to news that these funds have been sold to some outsider who wants a larger slice of the profits.
Thank you for sharing your insights. I agree with you that Vanguard's emerging technology funds are certainly safer. Having said that, since mid-2017 (and, especially, this year), ARKK and ARKW funds have quite significantly outperformed their Vanguard counterparts (e.g., VGT), with an interesting twist that ARKW has managed to maintain almost as low risk as VGT (in terms of max drawdown). But, generally, your point definitely stands - deciding to invest in ARK funds as opposed to safer Vanguard (or other) options appears to be just another case of risk tolerance.
Keenobserver
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Re: Hostile Takeover of ARK Investment Management?

Post by Keenobserver »

fingoals wrote: Sun Nov 15, 2020 10:37 pm
000 wrote: Sun Nov 15, 2020 9:39 pm
fingoals wrote: Sun Nov 15, 2020 9:29 pm
000 wrote: Sun Nov 15, 2020 8:29 pm I wouldn't be too worried about this... unless I were Cathie Wood or another member (shareholder) of ARK Investment Management LLC itself.

The big risk is that the new owner forces the funds to be managed other than how Cathie Wood and her team would. So if I were to own any ARK funds I would be paying attention for that happening, just like a manager leaving any other active fund. And if that happens, it will be disappointing to ARK fund investors, but there are many disappointments in investing... especially active investing.
Thank you for sharing your thoughts. As I said above, I do own a very small number of shares of some ARK funds now and, thus, will be following the story. Hopefully, nothing too dramatic will happen or, if things will look bad, at least, there will be enough time for shareholders to divest from troubled assets.
I doubt any ARK fund will turn into a "troubled asset". That would be something like "Washington Mutual Bank / Debt not acquired by JPMorgan" or "Lehman Brothers Holdings E-Capital Trust I" valued at 1/100th of 1% of its face amount. :D Sort from lowest market value to see an example.

I assume all the ARK ETFs are 1940 Act funds, so I don't see there being a risk of substantial loss of principal due to a potential takeover or change in management. The most "catastrophic" risk these funds are likely to face are their high flying stocks (e.g. TSLA) taking a bloodbath and never recovering in share price, but presumably those holding them want exposure to those kind of stocks anyway.
That's good news, I appreciate your insights. Precisely because of Tesla being widely considered dramatically overvalued, I have skipped investing in ARKK & ARKW and only invested in ARKG, ARKF and ARKQ, which lack TSLA exposure and represent sectors, which, I believe, will be outperforming the market in observable future. Another reason for my investment in these three ARK funds is a hope that their modest-to-mid growth in the near term (plus one decent e-commerce mid-growth stock) will dampen or even balance out potential short-term downside from my several investments in :twisted: high-growth / high-risk stocks. I will see if this strategy works pretty soon, keeping my fingers crossed ... ;-)
What are your thoughts on Tesla now? Maybe you wish they qere more than 10% ? I have Arkk also and plan to.hold
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fingoals
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Re: Hostile Takeover of ARK Investment Management?

Post by fingoals »

Keenobserver wrote: Mon Nov 16, 2020 7:17 pm
fingoals wrote: Sun Nov 15, 2020 10:37 pm
000 wrote: Sun Nov 15, 2020 9:39 pm
fingoals wrote: Sun Nov 15, 2020 9:29 pm
000 wrote: Sun Nov 15, 2020 8:29 pm I wouldn't be too worried about this... unless I were Cathie Wood or another member (shareholder) of ARK Investment Management LLC itself.

The big risk is that the new owner forces the funds to be managed other than how Cathie Wood and her team would. So if I were to own any ARK funds I would be paying attention for that happening, just like a manager leaving any other active fund. And if that happens, it will be disappointing to ARK fund investors, but there are many disappointments in investing... especially active investing.
Thank you for sharing your thoughts. As I said above, I do own a very small number of shares of some ARK funds now and, thus, will be following the story. Hopefully, nothing too dramatic will happen or, if things will look bad, at least, there will be enough time for shareholders to divest from troubled assets.
I doubt any ARK fund will turn into a "troubled asset". That would be something like "Washington Mutual Bank / Debt not acquired by JPMorgan" or "Lehman Brothers Holdings E-Capital Trust I" valued at 1/100th of 1% of its face amount. :D Sort from lowest market value to see an example.

I assume all the ARK ETFs are 1940 Act funds, so I don't see there being a risk of substantial loss of principal due to a potential takeover or change in management. The most "catastrophic" risk these funds are likely to face are their high flying stocks (e.g. TSLA) taking a bloodbath and never recovering in share price, but presumably those holding them want exposure to those kind of stocks anyway.
That's good news, I appreciate your insights. Precisely because of Tesla being widely considered dramatically overvalued, I have skipped investing in ARKK & ARKW and only invested in ARKG, ARKF and ARKQ, which lack TSLA exposure and represent sectors, which, I believe, will be outperforming the market in observable future. Another reason for my investment in these three ARK funds is a hope that their modest-to-mid growth in the near term (plus one decent e-commerce mid-growth stock) will dampen or even balance out potential short-term downside from my several investments in :twisted: high-growth / high-risk stocks. I will see if this strategy works pretty soon, keeping my fingers crossed ... ;-)
What are your thoughts on Tesla now? Maybe you wish they qere more than 10% ? I have Arkk also and plan to.hold
The upcoming inclusion of TSLA in S&P 500 is definitely a tailwind as indicated by today's 10%+ upside, which I welcome. At the same time, I still consider TSLA a pretty risky bet presently (in fact, more risky than NIO, XPEV and LI, due to a variety of factors). Thus, I don't plan to have any additional exposure to TSLA beyond relevant stake in one of three ARK funds that I have recently invested in (ARKQ). I haven't invested in ARKK and ARKW, because I wanted to avoid any exposure to TSLA. However, accidentally having missed the fact that ARKQ fund holds TSLA as well, I got myself exposed to the stock. How ironic ... :-) (Considering that TSLA represents 1.8% of the total value across all ARK funds that I invested in, it's a small risk / small reward story in my case.)
Keenobserver
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Re: Hostile Takeover of ARK Investment Management?

Post by Keenobserver »

fingoals wrote: Mon Nov 16, 2020 9:16 pm
Keenobserver wrote: Mon Nov 16, 2020 7:17 pm
fingoals wrote: Sun Nov 15, 2020 10:37 pm
000 wrote: Sun Nov 15, 2020 9:39 pm
fingoals wrote: Sun Nov 15, 2020 9:29 pm

Thank you for sharing your thoughts. As I said above, I do own a very small number of shares of some ARK funds now and, thus, will be following the story. Hopefully, nothing too dramatic will happen or, if things will look bad, at least, there will be enough time for shareholders to divest from troubled assets.
I doubt any ARK fund will turn into a "troubled asset". That would be something like "Washington Mutual Bank / Debt not acquired by JPMorgan" or "Lehman Brothers Holdings E-Capital Trust I" valued at 1/100th of 1% of its face amount. :D Sort from lowest market value to see an example.

I assume all the ARK ETFs are 1940 Act funds, so I don't see there being a risk of substantial loss of principal due to a potential takeover or change in management. The most "catastrophic" risk these funds are likely to face are their high flying stocks (e.g. TSLA) taking a bloodbath and never recovering in share price, but presumably those holding them want exposure to those kind of stocks anyway.
That's good news, I appreciate your insights. Precisely because of Tesla being widely considered dramatically overvalued, I have skipped investing in ARKK & ARKW and only invested in ARKG, ARKF and ARKQ, which lack TSLA exposure and represent sectors, which, I believe, will be outperforming the market in observable future. Another reason for my investment in these three ARK funds is a hope that their modest-to-mid growth in the near term (plus one decent e-commerce mid-growth stock) will dampen or even balance out potential short-term downside from my several investments in :twisted: high-growth / high-risk stocks. I will see if this strategy works pretty soon, keeping my fingers crossed ... ;-)
What are your thoughts on Tesla now? Maybe you wish they qere more than 10% ? I have Arkk also and plan to.hold
The upcoming inclusion of TSLA in S&P 500 is definitely a tailwind as indicated by today's 10%+ upside, which I welcome. At the same time, I still consider TSLA a pretty risky bet presently (in fact, more risky than NIO, XPEV and LI, due to a variety of factors). Thus, I don't plan to have any additional exposure to TSLA beyond relevant stake in one of three ARK funds that I have recently invested in (ARKQ). I haven't invested in ARKK and ARKW, because I wanted to avoid any exposure to TSLA. However, accidentally having missed the fact that ARKQ fund holds TSLA as well, I got myself exposed to the stock. How ironic ... :-) (Considering that TSLA represents 1.8% of the total value across all ARK funds that I invested in, it's a small risk / small reward story in my case.)
Well part of the charm of Tesla is in fact the autonomous tech which is what you are going into with ARKQ. I am still bullish on Tesla for a variety of reasons ( not the least amongst them Biden specifically mentioning EVs today) there is only 1 EV king at the moment. Look at their projected production into 2022 and margins. Lets not forget their solar panels ( again clean tech theme). NIO is quite attractive, but fail to see how a communist controlled company is less risky than an established international brand operating in several countries. NIO can hit a communist wall at anytime, although I see it going up for now. Tesla has the next 10 years planned out, everyone else is playing catch up.
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fingoals
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Re: Hostile Takeover of ARK Investment Management?

Post by fingoals »

Keenobserver wrote: Mon Nov 16, 2020 9:30 pm
fingoals wrote: Mon Nov 16, 2020 9:16 pm
Keenobserver wrote: Mon Nov 16, 2020 7:17 pm
fingoals wrote: Sun Nov 15, 2020 10:37 pm
000 wrote: Sun Nov 15, 2020 9:39 pm

I doubt any ARK fund will turn into a "troubled asset". That would be something like "Washington Mutual Bank / Debt not acquired by JPMorgan" or "Lehman Brothers Holdings E-Capital Trust I" valued at 1/100th of 1% of its face amount. :D Sort from lowest market value to see an example.

I assume all the ARK ETFs are 1940 Act funds, so I don't see there being a risk of substantial loss of principal due to a potential takeover or change in management. The most "catastrophic" risk these funds are likely to face are their high flying stocks (e.g. TSLA) taking a bloodbath and never recovering in share price, but presumably those holding them want exposure to those kind of stocks anyway.
That's good news, I appreciate your insights. Precisely because of Tesla being widely considered dramatically overvalued, I have skipped investing in ARKK & ARKW and only invested in ARKG, ARKF and ARKQ, which lack TSLA exposure and represent sectors, which, I believe, will be outperforming the market in observable future. Another reason for my investment in these three ARK funds is a hope that their modest-to-mid growth in the near term (plus one decent e-commerce mid-growth stock) will dampen or even balance out potential short-term downside from my several investments in :twisted: high-growth / high-risk stocks. I will see if this strategy works pretty soon, keeping my fingers crossed ... ;-)
What are your thoughts on Tesla now? Maybe you wish they qere more than 10% ? I have Arkk also and plan to.hold
The upcoming inclusion of TSLA in S&P 500 is definitely a tailwind as indicated by today's 10%+ upside, which I welcome. At the same time, I still consider TSLA a pretty risky bet presently (in fact, more risky than NIO, XPEV and LI, due to a variety of factors). Thus, I don't plan to have any additional exposure to TSLA beyond relevant stake in one of three ARK funds that I have recently invested in (ARKQ). I haven't invested in ARKK and ARKW, because I wanted to avoid any exposure to TSLA. However, accidentally having missed the fact that ARKQ fund holds TSLA as well, I got myself exposed to the stock. How ironic ... :-) (Considering that TSLA represents 1.8% of the total value across all ARK funds that I invested in, it's a small risk / small reward story in my case.)
Well part of the charm of Tesla is in fact the autonomous tech which is what you are going into with ARKQ. I am still bullish on Tesla for a variety of reasons ( not the least amongst them Biden specifically mentioning EVs today) there is only 1 EV king at the moment. Look at their projected production into 2022 and margins. Lets not forget their solar panels ( again clean tech theme). NIO is quite attractive, but fail to see how a communist controlled company is less risky than an established international brand operating in several countries. NIO can hit a communist wall at anytime, although I see it going up for now. Tesla has the next 10 years planned out, everyone else is playing catch up.
I hear you. However, there are always counter-arguments to any arguments. Let's see ...

Firstly, fully autonomous driving (which, I assume, what you have meant above) is still in a very early development stage, with significant global-scale deployments expected likely in decades. Secondly, while the partial autonomous driving functionality certainly has already arrived, Tesla faces significant competition in this regard from U.S., European and Asian manufacturers. For example, I have recently watched a video demonstrating self-parking and other autonomous functionality of EV designed and produced by one of major Chinese manufacturers and it certainly is on par, if not a bit better, than relevant Tesla's functionality. Speaking of U.S. competition, GM's Super Cruise technology is considered to be much better than Tesla's AutoPilot, with European competitors not far away (e.g., see https://www.consumerreports.org/car-saf ... ce-systems). Thirdly, many Asian EV manufacturers also expand into solar and battery markets (including significant R&D efforts and advanced technology initiatives) - I'm not even talking about companies focused on solar and battery technologies. Fourthly, the political aspect of considering Chinese manufacturers is a moot point, from a variety of perspectives, including: a) significant support of local EV manufacturers by the government, based on relevant long-term carbon reduction plans and programs; b) even without special support and related benefits (i.e., wide availability of loans and similar financial instruments for R&D, manufacturing expansion, etc.), there is more than enough room to grow for Chinese EV manufacturers due to enormous market size; c) plus, some people there prefer local brands out of patriotism and/or because they know the market better than Tesla and offer innovative features that cater to the local market, e.g., Nio's battery-as-a-service (BaaS) program makes total sense for consumers in China, where, unlike here in U.S., most of the urban population lives in huge apartment complexes with very limited room for local charging infrastructure; d) similarly to Korean automotive phenomenon of the previous decade or two (remember how Hyundai cars have been perceived in U.S. in regard to their quality and reliability?), the quality of Chinese EVs has recently risen dramatically to safely compete with Tesla and even to be considered being better in some aspects, e.g., quality of interior and wide integration of popular applications into auto infotainment systems; so, I will not be surprised to see some Chinese EVs becoming quite popular in European and other foreign markets (except for U.S. market, though). There are other factors at play as well, but the above-mentioned ones are my main relevant counter-arguments.
occambogle
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Re: Hostile Takeover of ARK Investment Management?

Post by occambogle »

Some posters mentioned VGT as a less "risky" tech fund alternative. I really dont find VGT that attractive, when 38% of the fund is invested in just two stocks Apple+Microsoft. Yes, the Stdev/volatility of VGT is lower than ARKK, but that just seems a huge concentration in two companies.

Anyway, back to the topic. I've no idea at all who this Youtuber is, and he seems to have various issues with "mainstream media" so I'm not at all supporting his comments one way or the other.... but in case it's of interest here is a video discussing the current situation with Resolute.
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Re: Hostile Takeover of ARK Investment Management?

Post by fingoals »

occambogle wrote: Tue Nov 17, 2020 1:05 am Some posters mentioned VGT as a less "risky" tech fund alternative. I really dont find VGT that attractive, when 38% of the fund is invested in just two stocks Apple+Microsoft. Yes, the Stdev/volatility of VGT is lower than ARKK, but that just seems a huge concentration in two companies.

Anyway, back to the topic. I've no idea at all who this Youtuber is, and he seems to have various issues with "mainstream media" so I'm not at all supporting his comments one way or the other.... but in case it's of interest here is a video discussing the current situation with Resolute.
Thank you for your comment. Re: VGT - I agree with you on significant lack of diversification with a huge AAPL and MSFT bias (it may be not a bad thing, considering that both are very solid companies - after all, AAPL, for example, represents a whopping 47.8% of Berkshire Hathaway's portfolio - but is definitely not for everyone). There is not much else that can be said about this IMO. Re: video - I think that the author's explanation provides a decent high-level clarification, but I've found the video somewhat repetitive with a touch of arrogance ("voice of reason", mainstream media's drama", etc.).
Keenobserver
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Re: Hostile Takeover of ARK Investment Management?

Post by Keenobserver »

fingoals wrote: Mon Nov 16, 2020 10:42 pm
Keenobserver wrote: Mon Nov 16, 2020 9:30 pm
fingoals wrote: Mon Nov 16, 2020 9:16 pm
Keenobserver wrote: Mon Nov 16, 2020 7:17 pm
fingoals wrote: Sun Nov 15, 2020 10:37 pm

That's good news, I appreciate your insights. Precisely because of Tesla being widely considered dramatically overvalued, I have skipped investing in ARKK & ARKW and only invested in ARKG, ARKF and ARKQ, which lack TSLA exposure and represent sectors, which, I believe, will be outperforming the market in observable future. Another reason for my investment in these three ARK funds is a hope that their modest-to-mid growth in the near term (plus one decent e-commerce mid-growth stock) will dampen or even balance out potential short-term downside from my several investments in :twisted: high-growth / high-risk stocks. I will see if this strategy works pretty soon, keeping my fingers crossed ... ;-)
What are your thoughts on Tesla now? Maybe you wish they qere more than 10% ? I have Arkk also and plan to.hold
The upcoming inclusion of TSLA in S&P 500 is definitely a tailwind as indicated by today's 10%+ upside, which I welcome. At the same time, I still consider TSLA a pretty risky bet presently (in fact, more risky than NIO, XPEV and LI, due to a variety of factors). Thus, I don't plan to have any additional exposure to TSLA beyond relevant stake in one of three ARK funds that I have recently invested in (ARKQ). I haven't invested in ARKK and ARKW, because I wanted to avoid any exposure to TSLA. However, accidentally having missed the fact that ARKQ fund holds TSLA as well, I got myself exposed to the stock. How ironic ... :-) (Considering that TSLA represents 1.8% of the total value across all ARK funds that I invested in, it's a small risk / small reward story in my case.)
Well part of the charm of Tesla is in fact the autonomous tech which is what you are going into with ARKQ. I am still bullish on Tesla for a variety of reasons ( not the least amongst them Biden specifically mentioning EVs today) there is only 1 EV king at the moment. Look at their projected production into 2022 and margins. Lets not forget their solar panels ( again clean tech theme). NIO is quite attractive, but fail to see how a communist controlled company is less risky than an established international brand operating in several countries. NIO can hit a communist wall at anytime, although I see it going up for now. Tesla has the next 10 years planned out, everyone else is playing catch up.
I hear you. However, there are always counter-arguments to any arguments. Let's see ...

Firstly, fully autonomous driving (which, I assume, what you have meant above) is still in a very early development stage, with significant global-scale deployments expected likely in decades. Secondly, while the partial autonomous driving functionality certainly has already arrived, Tesla faces significant competition in this regard from U.S., European and Asian manufacturers. For example, I have recently watched a video demonstrating self-parking and other autonomous functionality of EV designed and produced by one of major Chinese manufacturers and it certainly is on par, if not a bit better, than relevant Tesla's functionality. Speaking of U.S. competition, GM's Super Cruise technology is considered to be much better than Tesla's AutoPilot, with European competitors not far away (e.g., see https://www.consumerreports.org/car-saf ... ce-systems). Thirdly, many Asian EV manufacturers also expand into solar and battery markets (including significant R&D efforts and advanced technology initiatives) - I'm not even talking about companies focused on solar and battery technologies. Fourthly, the political aspect of considering Chinese manufacturers is a moot point, from a variety of perspectives, including: a) significant support of local EV manufacturers by the government, based on relevant long-term carbon reduction plans and programs; b) even without special support and related benefits (i.e., wide availability of loans and similar financial instruments for R&D, manufacturing expansion, etc.), there is more than enough room to grow for Chinese EV manufacturers due to enormous market size; c) plus, some people there prefer local brands out of patriotism and/or because they know the market better than Tesla and offer innovative features that cater to the local market, e.g., Nio's battery-as-a-service (BaaS) program makes total sense for consumers in China, where, unlike here in U.S., most of the urban population lives in huge apartment complexes with very limited room for local charging infrastructure; d) similarly to Korean automotive phenomenon of the previous decade or two (remember how Hyundai cars have been perceived in U.S. in regard to their quality and reliability?), the quality of Chinese EVs has recently risen dramatically to safely compete with Tesla and even to be considered being better in some aspects, e.g., quality of interior and wide integration of popular applications into auto infotainment systems; so, I will not be surprised to see some Chinese EVs becoming quite popular in European and other foreign markets (except for U.S. market, though). There are other factors at play as well, but the above-mentioned ones are my main relevant counter-arguments.
What would an appropriate entry point for NIO then? I feel I.might have missed that boat.
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Re: Hostile Takeover of ARK Investment Management?

Post by z3r0c00l »

I would gamble on the individual stocks myself long before letting some ETF fund manager do it for me at a cost and without my control. (She still thinks TSLA is going to $6,800? So it is going to be worth more than APPL soon?) And $16 billion AUM isn't much in my world since I own mutual funds that are closer to a trillion. $16 billion could be explained as as a few speculative bets. $980 billion is a consensus.
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Re: Hostile Takeover of ARK Investment Management?

Post by lassevirensghost »

So is the consensus then that Cathy Wood is NOT leaving Ark and will continue to manage as she has?
“Groucho, how do you invest your money?” | “All in bonds.” | “But Groucho, they don’t pay much return.” | “They do when you have a lot of em!”
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Re: Hostile Takeover of ARK Investment Management?

Post by fingoals »

Keenobserver wrote: Tue Nov 17, 2020 7:15 am What would an appropriate entry point for NIO then? I feel I.might have missed that boat.
IMO, a good entry point was during the second half of 2019 and first half of 2020. So, I have also missed the boat, but still decided to invest a small amount in each NIO, XPENG and LI. Unfortunately, being inexperienced in stock trading, I bought during pre-market hours last Friday, when, upon opening the daily session, these stocks relatively sharply dropped after a brief jump. :oops: Since Friday, the stocks have partially recovered, but I have learned a pretty expensive lesson that it is a bad idea to invest during after-hours trading, especially (as I read later) during first and last 30 minutes of a trading day.
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Re: Hostile Takeover of ARK Investment Management?

Post by fingoals »

z3r0c00l wrote: Tue Nov 17, 2020 8:00 am I would gamble on the individual stocks myself long before letting some ETF fund manager do it for me at a cost and without my control. (She still thinks TSLA is going to $6,800? So it is going to be worth more than APPL soon?) And $16 billion AUM isn't much in my world since I own mutual funds that are closer to a trillion. $16 billion could be explained as as a few speculative bets. $980 billion is a consensus.
I don't think the size of a fund is a critical success factor. Everyone starts small; I'm sure that currently huge Vanguard funds have been much smaller in their early days. Applying your logic to stocks, people would not invest in early AAPL or AMZN. Those who remained confident in these companies, have been rewarded handsomely. I have recently backtested and compared AAPL, MSFT and AMZN out of curiosity and discovered one interesting thing. An amount of just $1000 invested in those three in 1997 (adjusting to Amazon's IPO year) would grow to whopping $676K for AAPL and $605K for AMZN, but a measly $31K for MSFT, in 2020. Since 1997, Microsoft's stock has experienced a max. drawdown of 67%, whereas Apple's and Amazon's have experienced max. drawdowns of 79% and 93% (!). So, to me, the most interesting discovery was that the risk/reward curve might be very far from linear ...
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Re: Hostile Takeover of ARK Investment Management?

Post by z3r0c00l »

fingoals wrote: Tue Nov 17, 2020 5:31 pm
z3r0c00l wrote: Tue Nov 17, 2020 8:00 am I would gamble on the individual stocks myself long before letting some ETF fund manager do it for me at a cost and without my control. (She still thinks TSLA is going to $6,800? So it is going to be worth more than APPL soon?) And $16 billion AUM isn't much in my world since I own mutual funds that are closer to a trillion. $16 billion could be explained as as a few speculative bets. $980 billion is a consensus.
I don't think the size of a fund is a critical success factor. Everyone starts small; I'm sure that currently huge Vanguard funds have been much smaller in their early days. Applying your logic to stocks, people would not invest in early AAPL or AMZN. Those who remained confident in these companies, have been rewarded handsomely. I have recently backtested and compared AAPL, MSFT and AMZN out of curiosity and discovered one interesting thing. An amount of just $1000 invested in those three in 1997 (adjusting to Amazon's IPO year) would grow to whopping $676K for AAPL and $605K for AMZN, but a measly $31K for MSFT, in 2020. Since 1997, Microsoft's stock has experienced a max. drawdown of 67%, whereas Apple's and Amazon's have experienced max. drawdowns of 79% and 93% (!). So, to me, the most interesting discovery was that the risk/reward curve might be very far from linear ...
My thinking isn't quite the same. I see a fund with low assets as a red flag, normally they are small for a reason. Stocks are different as the market cap of a company can be measured, the stock market is a weighing machine. Mutual funds have no intrinsic AUM, that number is based solely on who wants to invest with them. And, the smaller the fund, the most expensive it tends to be. And finally, below a certain size, they tend to fold up.

In any case, let's just say that 16 billion is not an argument in favor of this fund as was implied above.
langlands
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Re: Hostile Takeover of ARK Investment Management?

Post by langlands »

z3r0c00l wrote: Tue Nov 17, 2020 8:00 am I would gamble on the individual stocks myself long before letting some ETF fund manager do it for me at a cost and without my control. (She still thinks TSLA is going to $6,800? So it is going to be worth more than APPL soon?) And $16 billion AUM isn't much in my world since I own mutual funds that are closer to a trillion. $16 billion could be explained as as a few speculative bets. $980 billion is a consensus.
$16 billion AUM is huge for an actively managed ETF. In fact, I think ARKK is one of the largest actively managed ETFs there is.

$980 billion would be ludicrous for any sort of active management.
Last edited by langlands on Tue Nov 17, 2020 7:14 pm, edited 2 times in total.
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fingoals
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Re: Hostile Takeover of ARK Investment Management?

Post by fingoals »

z3r0c00l wrote: Tue Nov 17, 2020 6:23 pm My thinking isn't quite the same. I see a fund with low assets as a red flag, normally they are small for a reason. Stocks are different as the market cap of a company can be measured, the stock market is a weighing machine. Mutual funds have no intrinsic AUM, that number is based solely on who wants to invest with them. And, the smaller the fund, the most expensive it tends to be. And finally, below a certain size, they tend to fold up.

In any case, let's just say that 16 billion is not an argument in favor of this fund as was implied above.
Fair enough. You have some good points. On a positive side, though, ARK funds have been growing (largely due to TSLA holding, but still), not shrinking.
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fingoals
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Re: Hostile Takeover of ARK Investment Management?

Post by fingoals »

langlands wrote: Tue Nov 17, 2020 7:11 pm
z3r0c00l wrote: Tue Nov 17, 2020 8:00 am I would gamble on the individual stocks myself long before letting some ETF fund manager do it for me at a cost and without my control. (She still thinks TSLA is going to $6,800? So it is going to be worth more than APPL soon?) And $16 billion AUM isn't much in my world since I own mutual funds that are closer to a trillion. $16 billion could be explained as as a few speculative bets. $980 billion is a consensus.
$16 billion AUM is huge for an actively managed ETF. In fact, I think ARKK is one of the largest actively managed ETFs there is.

$980 billion would be ludicrous for any sort of active management.
That's an interesting point, I haven't thought about this perspective. Thank you for sharing your insights.
ElJefeDelQueso
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Re: Hostile Takeover of ARK Investment Management?

Post by ElJefeDelQueso »

midareff wrote: Sat Nov 14, 2020 7:34 am
fingoals wrote: Sat Nov 14, 2020 7:03 am What do you think about this news? Is it still safe to invest or remain invested in ARK funds, considering the situation?

P.S. I'm very surprised that Cathie Wood has allowed such a terrible option to be included in the original contract. Why would you do this to your company?
I think it is financial porn I could not care less about.
Not a helpful or actionable comment.
Impatience
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Re: Hostile Takeover of ARK Investment Management?

Post by Impatience »

Characterizing it as a “hostile takeover” is pure clickbait. All they’re doing is exercising an option that ARK itself agreed to. You’d might as well claim as I’m conducting a “hostile takeover” of your shares when I exercise a call option you sold me.
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nedsaid
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Re: Hostile Takeover of ARK Investment Management?

Post by nedsaid »

I watched the video. This is just business and I don't think Resolute wants to kill the goose that lays the golden eggs by taking a majority stake. It is a negotiating ploy.

As I understand it, Resolute helped ARK get started with a big monetary investment and as part of the deal had an option to purchase a majority stake and they have until sometime in 2021 in exercise it. My understanding is that Resolute has exclusive rights as distributor of the funds and ETFs. My understanding is that ARK CEO Cathie Wood wants to expand the list of distributors for ARK Mutual Funds and ETFs.

Pretty much Cathie Wood and her team are the value of the ARK company. If they get mad and leave after a hostile takeover, Resolute would have an empty shell of a company. I don't think the people at Resolute are that stupid. Why would Resolute destroy their own investment?

Were I an investor, I would monitor the situation. Hopefully, your investments are in a tax deferred account like an IRA and you can sell if things with ARK go south. More complicated if you hold these in a taxable account as you have to consider capital gains. No reason to panic here.
A fool and his money are good for business.
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midareff
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Re: Hostile Takeover of ARK Investment Management?

Post by midareff »

ElJefeDelQueso wrote: Tue Nov 17, 2020 10:34 pm
midareff wrote: Sat Nov 14, 2020 7:34 am
fingoals wrote: Sat Nov 14, 2020 7:03 am What do you think about this news? Is it still safe to invest or remain invested in ARK funds, considering the situation?

P.S. I'm very surprised that Cathie Wood has allowed such a terrible option to be included in the original contract. Why would you do this to your company?
I think it is financial porn I could not care less about.
Not a helpful or actionable comment.
and yours is?

BTW, you might reread the OP's original post which asked; "What do you think about this news?" My post answered that question with what I thought about that news directly. U B the one off base here.
langlands
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Re: Hostile Takeover of ARK Investment Management?

Post by langlands »

midareff wrote: Wed Nov 18, 2020 9:51 am
ElJefeDelQueso wrote: Tue Nov 17, 2020 10:34 pm
midareff wrote: Sat Nov 14, 2020 7:34 am
fingoals wrote: Sat Nov 14, 2020 7:03 am What do you think about this news? Is it still safe to invest or remain invested in ARK funds, considering the situation?

P.S. I'm very surprised that Cathie Wood has allowed such a terrible option to be included in the original contract. Why would you do this to your company?
I think it is financial porn I could not care less about.
Not a helpful or actionable comment.
and yours is?

BTW, you might reread the OP's original post which asked; "What do you think about this news?" My post answered that question with what I thought about that news directly. U B the one off base here.
+1 for ElJefeDelQueso. Also, the reception of your comment in this thread makes clear that he is correct.
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midareff
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Re: Hostile Takeover of ARK Investment Management?

Post by midareff »

langlands wrote: Wed Nov 18, 2020 11:31 am
midareff wrote: Wed Nov 18, 2020 9:51 am
ElJefeDelQueso wrote: Tue Nov 17, 2020 10:34 pm
midareff wrote: Sat Nov 14, 2020 7:34 am
fingoals wrote: Sat Nov 14, 2020 7:03 am What do you think about this news? Is it still safe to invest or remain invested in ARK funds, considering the situation?

P.S. I'm very surprised that Cathie Wood has allowed such a terrible option to be included in the original contract. Why would you do this to your company?
I think it is financial porn I could not care less about.
Not a helpful or actionable comment.
and yours is?

BTW, you might reread the OP's original post which asked; "What do you think about this news?" My post answered that question with what I thought about that news directly. U B the one off base here.
+1 for ElJefeDelQueso. Also, the reception of your comment in this thread makes clear that he is correct.
I guess it's a good thing I am not interested in others opinion of my opinion.
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