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Cathie Wood says Ark Invest avoided Arm's blockbuster IPO because valuation was on 'high side'

Sep 22, 2023 - markets.businessinsider.com
Ark Invest CEO, Cathie Wood, did not participate in Arm's $55 billion initial public offering (IPO), citing overvaluation compared to its competitors. Wood also expressed concerns about Arm's emphasis on AI and the competitive dynamics in the market. She stated that there are much lower-priced names in Ark Invest's portfolios with more exposure to AI.

Arm's IPO was the largest since 2021, with shares soaring 25% on its first day of trading, valuing the company at about $65 billion. However, the company's value has since dropped to $53.5 billion. Arm's technology is used in more than 90% of smartphones, with about 70% of the world's population using Arm-based products. The news of Wood's non-participation in the IPO comes after Ark Invest sold Tesla shares worth $8.4 million.

Key takeaways:

  • Arm made its market debut last week, marking the biggest IPO in the US since late 2021.
  • Ark Invest's CEO, Cathie Wood, did not participate in Arm's $55 billion float, citing overvaluation compared to its competitors.
  • Arm's shares soared 25% on its first day of trading, leaving it worth about $65 billion, but has since lost value and closed Thursday valued at $53.5 billion.
  • Ark Invest offloaded Tesla shares worth $8.4 million this week.
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