Cathie Wood’s company ARK Invest has made a move to buy back shares of Coinbase Global after the COIN stock price dropped as a result of the SEC’s lawsuit against the crypto exchange.
Immediately after the SEC filed the lawsuit against Coinbase, the company’s share price dropped by nearly 20%, creating an opportunity for ARK Invest to buy shares at a cheap price and generate profits in the future. Three Ark Investment Management LLC acquired 419,324 shares of Coinbase for more than $20 million.
WHEN SEC Sues COINBASE, ARK INVEST BUY COINBASE
As reported by Bloomberg, Ark Invest purchased shares of Coinbase through the Ark Innovation ETF and two other additional funds led by Cathie Wood.
Following significant stock purchases in March and January, Ark Invest increased its stake to approximately 9.9 million COIN shares. According to public information, Ark Invest also purchased an additional 168,869 COIN shares at the beginning of May.
Notably, despite the bear market takeoff and layoffs that have taken place, hedge funds have shown confidence in Coinbase. During that time, Cathie Wood has stated that although Coinbase has lost a competitor, FTX, the exchange will still be successful. She highlighted her desire to shed light on the CEO’s management process as a positive factor.
The United States Securities and Exchange Commission (SEC) filed a lawsuit against Coinbase on Tuesday (June 6), alleging that the cryptocurrency exchange operated as an unregistered broker after confirming identify certain cryptocurrencies as securities. The SEC’s crackdown on Binance and Coinbase hurt the market at first, but there was a later, albeit modest, recovery.
COINBASE is constantly in trouble
Ever since Coinbase received notice from Wells about the sale of unregistered securities, the exchange has started a conflict with the Securities and Exchange Commission (SEC).
In addition, government officials are also investigating the Nasdaq-listed exchange regarding staking products. COIN stock price has dropped about 17% in the previous five days and is currently trading around $53 at press time.
Despite the difficult market conditions, Ark Invest still recommends buying COIN shares through its funds. Contrary to this, however, last year, Cathie Wood sold a large portion of the fund’s Coinbase shares in July 2022 after the SEC announced its first investigation into the exchange. This resulted in a loss of more than $350 million for those funds.
Ark Invest and Cathie Wood’s decision to buy or sell Coinbase shares represents volatility and uncertainty in the sector, and the ultimate decision of investment funds may depend on the elements and latest information on the legal and market situation.
While the Coinbase-related legal issue is far from over, several executives, including Brian Armstrong, have been accused of using inside information to avoid losses.
However, Cathie Wood’s Ark Invest invested a significant amount in COIN after missing out on Nvidia’s growth opportunity. This investment company owned 1.3 million COIN shares at the beginning of October. However, after deeming the share price too high, the company reduced this number to 390,000 shares. Meanwhile, Nvidia, the leader in Artificial Intelligence (AI) technology, achieved record-breaking growth to $1 trillion.
see more : Binance.US Trades Crypto at High Prices Amid Litigation Fears