Cathie Wood Sharply Lowers Remaining Exposure In JD And This Chinese E-commerce Company

Cathie Wood’s Ark Investment Management on Monday sharply lowered its remaining exposure in two Chinese technology companies amid a regulatory crackdown from Beijing. 

What Happened: The St. Petersburg, Florida-based investment firm nearly halved its remaining stake in Pinduoduo Inc PDD and shed about 12% of the total shares that it held prior to Monday’s trading in JD.com Inc JD, data from the popular asset management showed.

Ark Invest started selling shares in Pinduoduo in May< and barring a few buys in-between, the money managing firm had brought down its exposure in the agriculture-focused tech company to 508,779 shares — estimated to be worth $29.7 million at the end of 2021. 

The investment firm on Monday sold another 250,500 from that Pinduoduo stake on Monday.

In JD.com, Ark Invest sold 183,659 shares — estimated to be worth $12.55 million — on Monday. Prior to the day’s trade, it held 1,556,883 shares — worth $106.4 million — in the Chinese e-commerce company that rivals Alibaba Group Holdings BABA. 

Wood said in August last year that she is keeping an "open mind" on Chinese stocks as she believes there are still some very interesting companies in the innovation space.

See Also: Cathie Wood Is Aggressively Selling Chinese Stocks Like JD, Pinduoduo But Still Keeping An 'Open Mind'

Why It Matters: U.S.-listed Chinese stocks such as Didi Global Inc DIDI, Alibaba, and Nio Inc NIO have been under pressure after a series of regulatory crackdowns that are aimed at tightening Beijing’s grip on tech companies.

China’s Cyberspace Administration of China (CAC) on Tuesday set a Feb. 15 deadline for a new cybersecurity review measure to come into effect. The new measure lets network platform operators with personal information of at least one million users to undergo a security review before listing their shares overseas.

Price Action: Shares of PDD closed 4% lower at $56 a share on Monday, while those of JD closed 2.5% lower at $68.3 a share. PDD stock has plummeted about 66.4% over the past year while those of JD have fallen about 21%.