Is Cathie Wood Still Invested In Troubled Crypto-Linked Silvergate Stock?

The collapse of Sam Bankman-Fried's FTX cryptocurrency exchange appears to have further legs to play out as the crypto-friendly Silvergate Bank, which is owned by Silvergate Capital Corp. SI and lent heavily to the exchange, is now in troubled waters.

What Happened: Silvergate Capital announced this week that it was voluntarily liquidating the bank’s operations after raising doubts about its ability to continue as a going concern in an SEC filing on March 1.

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Against the backdrop of these adverse developments, at least one fund manager can heave a sigh of relief for its prescience.

Cathie Wood’s Ark Invest, which took a position in Silvergate Capital in November 2020, a year after the company went public, once held the shares in two of its exchange-traded funds — Ark Fintech Innovation ETF ARKF and Ark Next Generation Internet ETF ARKW.

Ark Dumps Stock: After sporadically picking up Silvergate Capital shares through early March 2021, Ark Invest continued to unwind its position.

After selling 191,107 shares of the company in mid-December 2022, ARKF followed up with another massive 403,990 shares in early January 2023. Since then, ARKF has sold 3,034 shares on Jan. 9, 300 on Jan. 10, 50 on Jan. 12 and 61 shares on Jan. 23.

Information on holdings available on Ark's website shows that neither ARKF nor ARKW now have any Silvergate shares.

The 403,990 shares ARKF sold on Jan. 5 came on the heels of the La Jolla, California-based bank holding company, announcing preliminary fourth-quarter results for December. The company said its total deposits from digital assets customers fell from $11.9 billion at the end of the September quarter to $3.8 billion at the end of the fourth quarter. As of Dec. 31, 2022, about $150 million of its deposits were from customers that had filed for bankruptcy.

Since then, the stock has shed about 87%.

Price Action: Silvergate settled 42.16% lower, at $2.84, on Thursday, according to Benzinga Pro data.

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