Friday, July 12, 2024

Cathie Wood Sells Into Tesla Strength, Buys Upstart Drone Maker

Cathie Wood and her Ark Invest firm on Tuesday shed some of their Tesla (TSLA) holdings and loaded up on budding drone maker Archer Aviation (ACHR). Tesla stock jumped Wednesday while ACHR shares spiked.


Cathie Wood’s ARKK Stock Picking Strategy Explained

Wood and Ark Invest sold a total of 62,867 shares of Tesla stock on Tuesday worth $14.538 million based on the 231.26 closing price, according to daily trade updates from the firm. Wood sold more than 56,000 shares from the ARK Innovation ETF (ARKK) while the rest were unloaded from the ARK Next Generation Internet ETF (ARKW).

Tesla stock spiked 10.2% Tuesday as Elon Musk’s EV company topped Q2 delivery expectations, despite deliveries declining 4% compared with last year.

Eyes On The Skies

Meanwhile, Wood and ARK purchased 406,912 shares of Archer Aviation on Tuesday worth $1.51 million, based on the 3.72 closing price.

San Jose-based Archer is developing electric vertical takeoff and landing (eVTOL) vehicles for urban environments, with the goal of creating a robust air-taxi service.

Archer Aviation on Tuesday secured an additional $55 million investment from Stellantis (STLA) through a strategic funding agreement. Stellantis invested $110 million in Archer in 2023 through a series of open market stock purchases and investments via the strategic agreement. The investment comes after Archer on June 8 completed a key test flight for its Midnight aircraft.

The company on June 5 announced it received FAA certification to begin operating a commercial airline. And on June 17, Archer reached an agreement with Signature Aviation, giving it access to the world’s largest network of private aviation terminals. Per the deal, Archer plans to launch air taxi services at United Airlines (UAL) hubs at the Newark International and Chicago O’Hare Airports as early as late 2025. The agreement also gives Archer access to takeoff and landing sites in New York, Los Angeles, San Francisco and Texas.

Signature Aviation operates more than 200 private terminals globally. Archer plans to expand across the network as aircraft availability increases, according to the company.

Archer followed that announcement on June 20 by revealing plans for an air mobility network across five locations in the San Francisco Bay Area.

Wood and ARK on Tuesday also added 3,788 shares of BLADE Air Mobility (BLDE), another company trying to build out its urban air mobility network. BLADE offers a mix of helicopter and charter jet services, rather than eVTOLs. But the company says it is preparing to adopt electric vehicle aircraft.

Other eVTOL drone makers include Eve Air Mobility (EVEX), a spinout of Brazilian jet maker Embraer (ERJ). And China-based EHang Holdings (EH) is developing an unmanned air taxi service.

Tesla Stock And ACHR Action

Tesla stock surged 6.6% Wednesday to mark seven consecutive daily gains.

TSLA stock is now down just a fraction in 2024.

ACHR stock spiked 13.2% Wednesday. Shares on Tuesday jumped 8.8% to rebound above their 50-day moving average.

However, ACHR stock tumbled 31.8% this year.

BLDE stock reversed to slide 2.3% Wednesday after gaining 2.7% Tuesday. BLADE shares eased 3.4% this year.

You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison


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