Ark Next Generation ETF Increases Chamath SPAC Stake, Decreases Zillow

Less than two weeks ago, ARK Investment CEO Catherine Wood began accumulating a stake in a SPAC from Chamath Palihapitiya. She has since added to that stake and also taken a stake in the same company in another ETF.

What Happened: The Ark Next Generation Internet ETF ARKW has increased the stake in Social Capital Hedosophia II IPOB, a SPAC set to merge with Opendoor.

Ark Next Generation Internet ETF took a small $910,000 stake in IPOB with an initial purchase. Through several additional purchases, the ETF now owns over 1.5 million shares.

Social Capital Hedosophia II now represents 1.1% of the ETF, worth $29.3 million.

Another ETF from Wood, the Ark Fintech Innovation ETF ARKF, has begun adding a stake in Social Capital Hedosophia II.

This other ETF holds a $2.8 million stake representing 0.35% of assets. As the smallest stock holding in the ETF, it's likely Wood will be adding more soon.

Why It’s Important: Wood is placing a big bet on the Palihapitiya-led SPAC that will compete in the online home selling market when the merger is complete.

Both ETFs are two of the top 10 performers in 2020, with shares of Ark Fintech Innovation up 75% and Ark Next Generation Internet up 101% year-to-date.

The inclusion and increased stake in Opendoor is coming at the expense of another stock. Zillow Group Z was the fourth-largest holding in the Ark Next Generation ETF two weeks ago. The company is now the 14th largest stake and represents 2.4% of the ETF. Shares have been sold several times over the last two weeks.

IPOB Price Action: Shares of Social Capital Hedosophia II are up 10% to $20.73. Shares hit new all-time highs of $22.45 earlier in the day.

Disclosure: The author is long shares of IPOB.