Cathie Wood Buys Zoom’s Dip to Pre-Pandemic Level After Results

(Bloomberg) — Cathie Wood bought Zoom Video Communications Inc’s shares as they tumbled to levels seen before the stock’s meteoric rise during the pandemic.

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Two Ark Investment Management LLC funds bought more than 800,000 shares on Tuesday, which were worth $68.25 million as of the day’s close, according to Ark’s daily trading data compiled by Bloomberg. The buying marked Ark’s first purchase of the video-conferencing company’s shares in three months.

Zoom plunged 17% to a closing price last seen in January 2020 after the firm cut its annual revenue forecast. Once a key pandemic beneficiary, the firm has been struggling as workplaces reopen, and said it’s losing sales from consumers and small business faster than anticipated.

The stock has declined 56% this year, missing out on a rally in technology stocks since mid-June. The latest results showed its transition from an essential Covid-era tool to an enterprise business platform is going to take longer than expected.

Still, some analysts remain optimistic about the stock’s outlook over the next 12 months.

Morgan Stanley analysts including Meta Marshall maintained their overweight rating, citing valuations, the company’s ability to build out the platform and opportunities outside of the US as reasons for remaining bullish.

Ark was the fifth-biggest shareholder of the company, holding about 9.58 million shares as of June-end, according to Bloomberg-compiled data. It has largely been adding shares of the platform since the fourth quarter of 2020. Bloomberg data also indicates that Ark either owns or has owned options of Zoom.

Ark Investment Management has lost almost half of its assets under management since December, and its flagship Ark Innovation ETF has plunged 54% in 2022 amid concerns that global monetary tightening will cap growth stock valuations. Wood is now closing one of her exchange-traded funds for the first time ever.