Tesla, Inc. (NASDAQ:TSLA) shares settled lower for a third session on a trot on Tuesday amid worries over a potentially dismal quarter and also rumors of a strategic shift in its product pipeline plans. Undeterred by the predicament, Ark Invest run by Tesla bull Cathie Wood was a buyer of the weakness.
What Happened: Ark, through its ARK Innovation ETF (NYSE:ARKK), ARK Autonomous Technology & Robotics ETF (CBOE: ARKQ) and ARK Next Generation Internet ETF (NYSE:ARKW), bought 20,683 shares of Tesla on Monday valued at $3.25 million. The stock settled the session down 2.71% at $157.11, according to Benzinga Pro data.
Intraday, the stock dropped as much as 4.8% to a low of $153.75 before recouping some of the losses.
Tesla is now the top holding of the firm's flagship – the ARKK exchange-traded fund, accounting for 9.83% of the portfolio based on the value of the shares. The fund currently holds 4,028,071 Tesla shares valued at $650.45 million.
Why It's Important: Tesla's shares are expected to be highly volatile over the next few sessions until the company releases its first-quarter results. Sell-side firms have been trimming their estimates and price targets for Tesla ever since it reported first-quarter deliveries miss in early April.
Rumors of putting the development of the sub-$30,000 EV on hold and the massive layoffs the company announced this week did little to improve sentiment.
Since Friday, the stock has lost a little over 10%, with the sell-off also a function of the broader market turmoil. Over these sessions, the company's market cap eroded by about $56 billion.
Tesla is scheduled to report its first-quarter results on Tuesday. Analysts, on average, expect the company to report earnings per share of 53 cents on revenue of $22.61 billion, according to Benzinga Pro data. This compares to the year-ago earnings of 85 cents per share and revenue of $23.33 billion.
Other Trades:
Wood's Ark also added 58,243 shares of cancer genomic test and analytics company Personalis, Inc. (NASDAQ:PSNL) and 78,112 shares of Blade Air Mobility, Inc. (NASDAQ:BLDE).
On the other hand, it sold 285,524 shares of sports-betting company DraftKings Inc. (NASDAQ:DKNG) and 3,436 shares of industrial equipment conglomerate Caterpillar, Inc. (NYSE:CAT).
On Tuesday, Goldman Sachs analyst Ben Miller initiated coverage on DraftKings with a Buy rating with a $60 price target.