Taking her passion for innovation-focused investing to the realm of extraterrestrial travel, Cathie Wood’s ARK Space Exploration & Innovation ETF (BATS:ARKX) launched in early 2021, meant to take advantage of the wave of interest in the sector, fueled in part by enthusiasm for developing commercial space companies from high-profile billionaires like Elon Musk, Jeff Bezos and Richard Branson.
However, since it hit the market nearly two years ago, ARKX has had trouble getting off the launchpad. The ETF has never shown a lifetime gain of more than 4% and is now sitting more than 30% below the initial price with which it hit the market.
This is part of a general reconsideration of space-related stocks following a boom in 2021. For instance, Richard Branson’s Virgin Galactic (SPCE) reached a peak of $62.80 in February of 2021, a little more than a month before ARKX hit the market. It would trade above $57 again in June before initiating a steep decline.
SPCE closed Thursday’s trading at $5.38 — less than 10% of the peak price it reached in 2021. Even over the past year, the stock has fallen more than 36%, and that comes after a rebound of more than 50% in the early weeks of 2023.
This pattern has repeated in other stocks. Rocket Lab USA (RKLB) once touched a high of $21.34 but now trades below $5, with a one-year decline of more than 40%. Astra Space (ASTR) has fallen nearly 90% in the past year and is trading below $1 a share. Meanwhile, Virgin Orbit (VORB) and Terran Orbital (LLAP) have each fallen about 80% over a 12-month period.
Houston, We Have a Problem
ARKX was launched to take advantage of the wave of interest in this sector as the 2020s began. As an add-on to Wood’s ARK Invest family, the ETF focused on delivering exposure to companies targeting space exploration, as well as firms involved with technologies required to go beyond the surface of the earth.
However, ARKX came just as the interest in space stocks was cresting and has generally lost ground since. See below a walkthrough of events for ARKX since the fund was unveiled back in 2021:
- Mar. 30, 2021: ARKX launched at $20.50 a share.
- Apr. 30, 2021: One month after its unveiling ARKX amassed $672.68M of capital.
- Aug. 2, 2021: ETF hits highest point at $21.33 a share.
- May 9, 2022: ARKX suffered worst one-day drop at -5.6%.
- Nov. 10, 2022: was ARKX’s best one-day rise at +6.8%.
- ARKX never moved higher than 4% from its debut.
- ARKX crumbled 34% since its launch.
- Since Apr. 30th 2021 ARKX has watched $221.41M exit the door.
See a lifetime chart below of ARKX
ARKX’s top holdings include Trimble (TRMB), Iridium Communications (IRDM), Kratos Defense & Security Solutions (KTOS), L3Harris Technologies (LHX), Deere & Co (DE), and UiPath Inc (PATH) which all rank among ARKX’s top ten weighted positions.
What Other Investors Say About ARKX
Seeking Alpha contributor Oakridge Trading says the bears are still in control on ARKX. The firm stated, “Despite a 30% drop in the previous year, ARKX is still an excellent short.”
Fellow contributor ZMK Capital added that ARKX’s “underlying selection of speculative, sometimes illiquid equities no longer suits present macro environment.”
In other related Ark Invest news, Cathie Wood unloaded just over 100K shares of Exact Sciences on Tuesday through (ARKK) and (ARKG) after her team predicted that the stock could nearly triple in value by the year 2027 just a few weeks back.