Ark Invest continues rebalancing, offloads $6.4 million worth of Coinbase shares

Ark Invest offloaded 25,662 Coinbase shares across two of its exchange-traded funds on Thursday, according to the company’s latest trade filing.

The investment firm sold 22,690 shares ($5.7 million) from its Innovation ETF (ARKK) and 2,972 shares ($742,000) from its Next Generation Internet ETF (ARKW).

The $6.4 million worth of COIN Ark offloaded yesterday represents its first major Coinbase share sales since it offloaded $21 million worth of the stock on March 26.

Ark’s investment strategy aims to let no individual holding take up more than 10% of an ETF’s portfolio to maintain diversification within its funds — meaning it is likely to continue rebalancing its fund weightings if Coinbase’s stock price continues to rise compared to other holdings.

During a QA session on the social platform Reddit last week, when a user inquired about the firm’s rationale for “dumping” its Coinbase shares, Ark Invest CEO Cathie Wood responded , “We are not dumping. This is what active management is all about.”

"Coinbase has increased roughly ninefold since spring of 2023," Wood added. "It has been more than 10% of the portfolio. We are simply taking profits. It is still the number one position and we are redeploying those profits into stocks that, just like Coinbase roughly a year ago, have been hurt by very short-term news, including Tesla, and a lot of them are in the life science space."

According to the firm’s latest disclosures, Coinbase remains the largest holding within its ARKK ETF with a weighting of 9.9%. However, Coinbase has slipped to the second-largest holding in its ARKW fund, with a weighting of 10.1%, just behind Ark’s own spot Bitcoin ETF (ARKB) at 10.2%.

ARKK’s Coinbase holdings have a market value of $708.1 million, whereas ARKW’s COIN weightings are valued at $168.8 million at current prices. Overall, the ARKK and ARKW funds are up 29.4% and 58.2% over the past year, respectively.

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Oppenheimer raises Coinbase share price target to $276

Ark Invest’s latest sales come as New York-based investment bank and financial services firm Oppenheimer raised its Coinbase share price target to $276 yesterday, up from a previous target of $200, while reiterating its buy rating.

“The adoption of digital assets continued after the approval of spot Bitcoin ETFs in January," Oppenheimer Executive Director Owen Lau wrote in a note. "We estimate that COIN's 1Q24 trading volume would be up 95% quarter-on-quarter, and 107% year-on-year to $300 billion.”

Oppenheimer’s price target is 10.5% higher than Coinbase’s closing share price of $249.61 on Thursday. COIN traded down 0.8% yesterday but is up 8.5% over the past month and 44.3% year-to-date, according to TradingView.

COIN/USD price chart. Image: TradingView .

Coinbase is currently valued at $46.4 billion, according to The Block’s data dashboard .