Tesla, Inc. TSLA shares settled lower for a third session on the trot on Tuesday amid worries over a potentially dismal quarter and also rumors of a strategic shift in its product pipeline plans. Undeterred by the predicament, Ark Invest run by Tesla bull Cathie Wood was a buyer of the weakness.
What Happened: Ark, through its ARK Innovation ETF ARKK, ARK Autonomous Technology & Robotics ETF ARKQ and ARK Next Generation Internet ETF ARKW, bought 20,683 shares of Tesla on Monday valued at $3.25 million. The stock settled the session down 2.71% at $157.11, according to Benzinga Pro data.
Intraday, the stock dropped as much as 4.8% to a low of $153.75 before recouping some of the losses.
Tesla is now the top holding of the firm’s flagship – the ARKK exchange-traded fund, accounting for 9.83% of the portfolio based on the value of the shares. The fund currently holds 4,028,071 Tesla shares valued at $650.45 million.
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Why It’s Important: Tesla’s shares are expected to be highly volatile over the next few sessions until the company releases its first-quarter results. Sell-side firms have been trimming their estimates and price targets for Tesla ever since it reported first-quarter deliveries miss in early April.
Rumors of putting the development of the sub-$30,000 EV on hold and the massive layoffs the company announced this week did little to improve sentiment.
Since Friday, the stock has lost a little over 10%, with the sell-off also a function of the broader market turmoil. Over these sessions, the company’s market cap eroded by about $56 billion.
Tesla is scheduled to report its first-quarter results on Tuesday. Analysts, on average, expect the company to report earnings per share of 53 cents on revenue of $22.61 billion, according to Benzinga Pro data. This compares to the year-ago earnings of 85 cents per share and revenue of $23.33 billion.
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Other Trades:
Wood’s Ark also added 58,243 shares of cancer genomic test and analytics company Personalis, Inc. PSNL and 78,112 shares of Blade Air Mobility, Inc. BLDE.
On the other hand, it sold 285,524 shares of sports-betting company DraftKings Inc. DKNG and 3,436 shares of industrial equipment conglomerate Caterpillar, Inc. CAT.
On Tuesday, Goldman Sachs analyst Ben Miller initiated coverage on DraftKings with a Buy rating with a $60 price target.
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