Cathie Wood-led Ark Investment Management believes the Silvergate Capital Corp SI stock will benefit from increased crypto adoption and investors likely sold the stock last week to raise funds and buy Coinbase Global Inc COIN on its Nasdaq debut last week.
What Happened: Silvergate shares are down 22% since Wednesday after investors rushed to buy the biggest U.S. cryptocurrency exchange desk Coinbase stock as it began trading on the Nasdaq through a direct listing.
According to Ark, which has been buying Coinbase shares heavily since its listing, investors potentially took profits to diversify their exposure to crypto in the public markets.
See also: Is Crypto a Good Investment?
"In our view, the Silvergate Exchange Network (SEN), with its strong network effects, positions Silvergate as both a facilitator and a prime beneficiary of increased crypto adoption," the hedge fund said.
The New York-based firm, which holds Silvergate stock via its Ark Fintech Innovation ETF ARKF and the ARK Next Generation Internet ETF ARKW, had sold some of its stake in Silvergate in the runup before Coinbase’s debut.
As of April 19, Ark’s Fintech Innovation ETF holds 1,287,561 shares of Silvergate or about 3.94% of the ETF’s total weight. Its Next Generation Internet ETF holds 581,047 shares or about 1.10% of the ETF’s total eight.
In value terms, the current total stake in Silvergate adds up to about $248.5 million.
Ark Investment firm bought more shares of Coinbase on Friday and as of April 19 holds a total of 12,74,521 shares, or about $435.89 million. It bought the shares via three of its ETFs, namely; the Ark Fintech Innovation ETF, the ARK Next Generation Internet ETF and the Ark Innovation ETF.
Silvergate provides financial infrastructure solutions in the cryptocurrency industry and counts Coinbase and Square Inc SQ among clients.
Price Action: Shares of Silvergate closed 4.38% lower at $$133 on Friday and are up about 78.9% on a year-to-date basis.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.
All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.
Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.
Rate collection and criteria: Click here for more information on rate collection and criteria.