Ace hedge fund manager Cathie Wood’s recently launched fund, ARK Venture Fund, has taken a bet on Elon Musk’s Twitter. Cathie’s team has full faith in Musk’s capability to turn Twitter into a global super-app. In the investment thesis, Cathie noted that Twitter has transformed itself into one of the most powerful social media tools, used for instant news flow, idea sharing, and conversation hubs.
Meanwhile, the ARK camp also acknowledges that Twitter has lost its sheen lately. “While it has struggled to scale user growth, engagement, and advertiser dollars in the past decade and has ceded some of its dominance to more content-rich platforms like Facebook, Instagram, YouTube, and TikTok, we believe that Twitter is valuable to those who have built audiences and businesses on its platform,” they added.
The thesis also pitches the possibility of converting Twitter into a digital wallet by enabling payments and other financial services.
Importantly, the thesis pointed to Musk’s ability to successfully lead other ventures, including PayPal (NASDAQ:PYPL), Tesla (NASDAQ:TSLA), and SpaceX. Also, the thesis states that Musk could “look to the many crossover opportunities that exist between his companies and will optimize for vertical integration where he can.”
Cathie’s ARK Venture Fund is a public-private cross-over fund. Alongside Twitter, other private companies in the fund are Epic Games, Freenome, Chipper Cash, MosaicML, and Flexport.
The list of public companies includes Cathie’s all-time favorites; Tesla, Roku (ROKU), Zoom Video Communications (ZM), Coinbase (COIN), Roblox (RBLX), and Nvidia (NVDA).
Is ARKK a Good Buy Now?
On October 31, ARK Invest celebrated its eighth anniversary. Notably, Cathie’s flagship fund, the ARK Innovation ETF (ARKK), has tumbled nearly 60.1% so far this year.
