Roku, Tesla, and Other Cathie Wood Favorites Are Falling

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Cathie Wood’s $12 billion flagship exchange-traded fund was falling again in Monday trading. It is another sign that “innovation stocks” such as

Roku

and

Tesla

remain under pressure.

Wood’s

ARK Innovation ETF
(ticker: ARKK) was down 5.3% in Monday trading. Its top holdings include

Zoom Video Communications

(ZM), Tesla (TSLA), Roku (ROKU),

Crispr Therapeutics

(CRSP), and

Block

(SQ), which were getting hammered Monday. Zoom stock was down 3.9%; Telsa stock was down 3.5%; Roku stock was down 5.3%; Crispr stock was down 12%; and Block stock was down 6.5%.

The

ARK Innovation ETF

has fallen about 65% in the past year as investors fled from growth stocks in the months after the

Nasdaq Composite’s
Nov. 19 record close. High-growth companies have struggled amid rising bond yields because higher yields effectively lower the value of future profits. Stocks were falling Monday as investors worried about what steps the Federal Reserve might take to rein in inflation, and whether such actions could lead to a recession.

Among Wood’s big bets, it has been especially tough for shares of businesses that saw an influx of demand amid Covid-19 shutdowns—such as

Teladoc Health

(TDOC)—and companies operating in the cryptocurrency space such as Square and

Coinbase Global

(COIN). Teladoc stock was down 5.5% while Coinbase stock was down 13%.

The

Renaissance IPO ETF
(IPO)—a portfolio of initial public offerings within the last two years—was down 4.5%, too. That doesn’t bode well for start-ups that may need to re-evaluate their private valuations.

Write to Connor Smith at [email protected]