Polarizing tech investor Cathie Wood doubled down on Zoom — even as the videoconferencing company’s stock plummeted 17 percent on Tuesday on forecasts for slower growth.
Wood on Tuesday bought more than $50 million of Zoom stock through two exchange-traded funds she manages at her investment firm Ark Invest, company records show.
Ark’s flagship ARK Innovation ETF snapped up 157,000 Zoom shares valued at about $45.5 million, company records show. The ARK Next Generation Internet ETF also added 37,000 shares worth roughly $11 million.
Wood — who has made a name for herself in recent years with bold and controversial bets on buzzy tech stocks like Tesla — shrugged off Zoom’s warnings about slowing revenue growth that sent other investors fleeing on Tuesday.
In an earnings release and call, Zoom had told investors that it took in a record $1.02 billion in revenue during the second quarter, but added that it expected revenue to stay the same or even slightly decline during the quarter ending Sept. 30.
Those results were enough to spook many investors who had grown used to quarter after quarter of blistering growth for Zoom during the pandemic.
The company’s stock fell 17 percent on Tuesday, closing at $289.50, according to MarketWatch data.
Zoom shares had slightly recovered as of mid-day on Wednesday, trading up about 2 percent at $295.30.
San Jose, California-based Zoom rocketed from an obscure firm at the beginning of 2020 to a household name just months later.
The company’s stock surged from just $67.28 at the beginning of 2020 to $559 last October. It has since declined by nearly half amid vaccinations and reopenings of offices.
Wood’s signature strategy of heavily investing in trendy tech stocks like Zoom, Tesla, Coinbase and Robinhood resulted in mouthwatering returns that far outperformed the broader market for much of the pandemic.
Her funds’ performance has been more mixed in recent months amid a rebound of stalwart stocks like banks and oil companies.
Even as Wood doubles down on Zoom, some critics say her strategy leaves her sitting on a tech bubble that’s poised to pop.
In August, Michael Burry — an investor known for reaping a windfall through a “big short” against the housing market in 2008 — revealed that he was now betting against Wood’s ARK Innovation fund.
On Twitter, Wood countered, “I do not believe that [Burry] understands the fundamentals that are creating explosive growth and investment opportunities in the innovation space.”