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Cathie Wood of ARK Invest has Roku as one of the largest investments in her funds.
Eva Marie Uzcategui/Bloomberg
Rokus
last week’s earnings report sent stocks into free fall, but Cathie Wood’s ARK Invest was among the buyers.
Roku
(ticker: ROKU) shares fell 23% Friday after the company reported disappointing results and warned of uncertainty for the advertising market. But the stock rose 10.1% to $72.14 Monday after Cathie Wood’s ARK Invest de
ARK Innovation ETF
(ARKK) bought 373,857 shares on Friday.
ARK Next Generation Internet
exchange-traded fund (ARKW) and the
ARK Fintech Innovation ETF
(ARKF) also bought 37,570 and 37,570 shares, respectively, on Friday.
Roku operates a platform that allows users to access popular streaming services and cut down on ads and subscriptions. Roku is best known for its streaming sticks that plug into TVs to provide access to the Roku platform. Roku stock is the third largest holding in Wood’s flagship innovation fund, weighing in at 6.39%. The share is the fourth largest holding in the ARKW fund with a weight of 6.82 percent. It only has a 0.99% weight in the fintech fund.
The stock had traded to $434.49 last year before falling as analysts lowered their growth expectations during the reopening. Now concerns about the economy have weighed further on the company’s prospects as advertisers cut back on spending.
BofA Securities analyst Ruplu Bhattacharya downgraded his rating all the way to Buy’s Underperform, lowering his $55 price target from $125 in a note on Friday. That target represents a drop of nearly 24% from recent levels.
Bhattacharya expects inflation, recession and supply chain headwinds to continue for the next two to three quarters. He warned that the fourth quarter could be worse than the third quarter if the macroeconomic environment deteriorates.
“The Bulls Will Point To”
Rokus
larger scale and that appreciation is back at prepandemic levels; however, we don’t see an easy solution to the short-term monetization problem,” Bhattacharya added.
Write to Connor Smith at [email protected]
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