The world’s richest person acquired a leading social media platform last week. With the deal, investors are no longer able to buy shares of Twitter Inc as a public company. Here’s a way that investors can get new exposure to the social media platform.
What Happened: Last week, Tesla Inc TSLA and SpaceX CEO Elon Musk completed a $44 billion acquisition of Twitter.
The acquisition included funding from several key players including Binance, FTX CEO Sam Bankman-Fried and Twitter co-founder and former CEO Jack Dorsey.
Another investor in the Twitter deal was Ark Funds, the ETF company led by Cathie Wood.
Twitter is listed as a private investment company in the Ark Venture Fund on its website. The Ark Venture Fund is a closed-end fund that allows investors to put their money in private companies held in the fund.
The Ark Venture Fund was launched in September and has a goal of investing in companies in the sectors of artificial intelligence, autonomous vehicles, fintech, DNA sequencing, robotics and 3D printing. All of these sectors are familiar themes for the Ark Funds ETFs that focus on innovative technology.
The investment in Twitter might not be a huge surprise to those who follow Ark Funds. Several of the company’s ETFs previously held stakes in Twitter before selling earlier this year when Musk turned down a seat on the Board of Directors.
Ark Invest Chief Futurist Brett Winton spoke positively of Musk’s deal recently.
“Status quo ante, if @elonmusk says the ‘wrong thing’ and gets de-platformed that substantially degrades his ability to synchronize and communicate with customers, stakeholders and employees,” Winton said.
Winton said the acquisition by Musk could lower the risk.
“Further, that the platform can be capriciously and arbitrarily denied to *anyone* both weakens the business-case for the platform and invests the platform operator with more power than is logical.”
Wood also spoke positively of the acquisition recently and highlighted that Musk might work closely with Dorsey and open up the ecosystem.
“I’m kind of excited to see what Elon will do,” Wood said. “Twitter, we think, is going to give us more tools to filter out the nonsense to get right down to business.”
Related Link: Cathie Wood's Funds Deliver Mixed Q3 Results
Investing in the Ark Venture Fund: The Ark Venture Fund is open to all U.S. investors both accredited and non-accredited.
“By launching the Ark Venture Fund, we seek to augment venture capital, offering all investors access to what we believe are the most innovative companies throughout their private and public market life cycles,” Wood said.
Through a partnership with Titan, a $500 minimum investment can get investors access to the Ark Venture Fund. The minimum investment and access to all investors could differentiate the Ark Venture Fund from rivals that require a larger minimum investment and also a minimum amount of net assets. Investments in the fund can also be done via retirement accounts through the partnership with Titan.
The Ark Venture Fund plans to invest in 25 to 50 holdings, with 20% to 85% of assets allocated to private companies and the remainder going to companies that are already public.
Twitter makes up 12% of the fund’s assets, tied with biotechnology company Freenome as the largest holding outside of cash (29% currently). Video game company Epic Games is another large holding at 8% of assets.
Other private companies in the fund include Chipper Cash, MosaciML and Flexport.
The fund also counts several Ark favorites among the holdings including Block Inc SQ, DraftKings Inc DKNG, NVIDIA Corp NVDA, Coinbase Global COIN, Roblox Corporation RBLX, Roku Inc ROKU, Shopify Inc SHOP, Tesla Inc, Twilio Inc TWLO, UiPath PATH and Zoom Video Communications ZM.
The fund gives investors exposure to both Tesla and Twitter and could become a favorite of fans of Musk.
Ark has been a long supporter of Musk and Tesla with the electric vehicle company currently the largest holding in the Ark Next Generation Internet ETF ARKW and the Ark Autonomous Technology & Robotics ETF ARKQ and the second-largest holding in the flagship Ark Innovation ETF ARKK.
Missing from the venture fund is the privately held space company SpaceX, which could be an item to watch if it is added in the future to give investors a way to invest in Musk’s three largest companies.
Photo: Courtesy of shutterstock.com
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