Cathie Wood Makes Massive $12M Purchase In This Streaming Company Post Earnings

Cathie Wood-led ARK Investment Management bought a massive stake in digital media player-maker Roku Inc ROKU on Thursday following its quarterly earnings release.

Funds operated by ARK bought over 215,000 shares of Roku at an estimated valuation of over $12 million based on Thursday's closing price. The purchase was done via the flagship ARK Innovation ETF ARKK, the ARK Next Generation Internet ETF ARKW and the ARK Fintech Innovation ETF ARKF.

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Roku reported total net revenue of $741 million which came in below the consensus estimate of $801.69 million. Gross profit was down 7% year-over-year to $338 million. The company pointed out it expects macro uncertainties to persist throughout 2023 and that discretionary spending is likely to remain muted as consumers remain pressured by inflation and recessionary fears.

"Against this backdrop, our outlook for Q2 is for total net revenue of roughly $770 million, total gross profit of roughly $335 million, and Adjusted EBITDA of negative $75 million," the company guided.

Roku shares have gained over 40% since the beginning of the year. Last year, ARK's analysts led by Nicholas Grous had said in a note that Roku shares will climb to $605 by 2026. It doesn't, therefore, come as a surprise that Roku constitutes the second largest holding, both in the ARK Innovation ETF and the ARK Next Generation Internet ETF.

Major Buy: ARK also lapped up shares of Robinhood Markets Inc HOOD at an estimated valuation of over $1 million based on Thursday's closing price. Shares of Robinhood have lost over 9% in the last five days, potentially making it a good candidate for bottom fishing.

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Posted In: EquitiesLong IdeasBroad U.S. Equity ETFsMarketsTrading IdeasETFsARK Investment ManagementCathie WoodRobinhood Markets IncRoku
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