Monday, January 30, 2023

Cathie Wood Buys Tesla Stock Amid Plunge After Deliveries Miss

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(Bloomberg) — Cathie Wood bought Tesla Inc. stock amid a rout on Tuesday, reaffirming her conviction in the electric-vehicle producer even as many investors have bailed out due to the multiple headwinds the company faces.

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Funds backed by Wood’s firm Ark Investment Management LLC bought more than 176,000 shares of the automaker in the first US trading session of this year, according to Ark’s daily data. The purchases came as Tesla stock plunged 12%, the biggest one-day drop in more than two years, after the company missed Wall Street’s consensus estimate for quarterly deliveries despite offering hefty incentives.

Wood’s exchange-traded funds have acquired slightly more than 938,000 shares of the EV producer since Oct. 3, when they started their latest buying streak, according to Ark trading data compiled by Bloomberg. The October-December period marked the first quarter in seven in which Ark net-bought Tesla stock.

Tuesday’s fall adds to Tesla’s 65% tumble last year amid concerns ranging from rising interest rates and inflation weighing on EV demand to growing competition and supply-chain issues to criticism of Chief Executive Officer Elon Musk’s involvement in Twitter Inc.

The third-straight delivery miss prompted several analysts to cut price targets on the stock, resulting in Tesla’s lowest average 12-month stock forecast since October 2021. Still, the consensus target price implies that shares should more than double over the next 12 months.

To be sure, historical tightening by the US Federal Reserve and global recession fears have continued to batter growth stocks that make up the majority of Ark’s holdings. Wood’s flagship ARK Innovation ETF fell 2.5% on Tuesday, adding to last year’s 67% decline.

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