Source: Sina Finance
Cathy Wood, founder of Ark Investment Management$NVIDIA (NVDA.US)$The decision to sell most of her Nvidia shares when the share price was below $150 per share proved to be expensive.
According to media estimates, the well-known fund manager's company missed out on returns of up to 1.2 billion US dollars because it was excluded from Nvidia's current round of gains.
Ark has sold 1.3 million Nvidia shares through its funds since the fourth quarter of 2022, according to the 13F filing filed with the US Securities and Exchange Commission (SEC).
Most of these sales occurred in November 2022, just before the release of ChatGPT helped trigger a sharp rise in the stock market driven by artificial intelligence.
In the fourth quarter of 2022, the average price of Nvidia shares was around $146. Since then, the stock has risen 6.5 times and closed at $1096.33 on Friday.
Ark decided to sell 859,000 Nvidia shares in the fourth quarter of 2022 alone, losing $854 million in returns.
In February 2023, Wood said in an interview that although she likes Nvidia's stock, its valuation is too high. Nvidia's market capitalization was around $575 billion at the time and has now reached nearly $2.8 trillion.
Since then, Ark has continued to reduce its holdings in Nvidia, selling 109,000 shares in the first quarter of 2023, 118,587 shares in the second quarter of 2023, and a total of 147,651 shares in the second half of 2023.
In the first quarter of 2024, Ark continued to reduce its Nvidia shares and sold 81,239 shares. As of March 31, Ark still holds 67,000 Nvidia shares worth approximately $75 million.
According to Stockcircle, Ark first purchased Nvidia's shares in the fourth quarter of 2016 at an average price of around $81 per share.
In an interview earlier this year, Wood said she still doesn't agree with Nvidia's sky-high valuation.
“In fact, I've been watching Nvidia my entire career since it went public. It's a very cyclical stock,” Wood said, adding that overordering Nvidia's GPUs could cause painful inventory adjustments for the company.
“Everyone was excited and trying to get in at the same time, so there were double orders, triple orders, quadruple orders, then inventory revisions. We think this will happen again.”
Ark has reallocated the proceeds from the sale of Nvidia shares to other potential artificial intelligence companies, although few of these investments have been successful.
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