Pro: ‘Cathie Wood’s ARKK will continue to go down in the long term’

on Jun 16, 2022
  • Danielle Shay says Ark Innovation ETF still has more downside from here.
  • The Simpler Trading expert is buying "SARK" to short Cathie Wood ETF.
  • ARKK is currently down more than 60% versus the start of the year 2022.

Chances of a recovery in Cathie Wood’s flagship Ark Innovation ETF are rather slim, says Danielle Shay. She’s the Director of Options at Simpler Trading.

Shay sees more downside in ARKK

ARKK is down more than 60% for the year that Shay attributes largely to it holding companies that are still unprofitable. This afternoon on CNBC’s “The Exchange”, she said:

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I think this fund in the long-term continues to go down primarily because if you look at its top tickers, a lot of them are losing money and most of them are continuing to tank. Roku, [for example], I can’t imagine that it will trade higher.

The only name on the Cathie Wood ETF that she agrees with, is Tesla Inc (NASDAQ: TSLA), and even that is massively underperforming this year.

Shay is betting against Cathie Wood

Interestingly, Shay sees enough downside in the Ark Innovation exchange-traded fund to look for ways to short it. Explaining how she’s going about it, the Simpler Trading expert noted:

The way this market is continuing to bleed, I think ARKK still has more downside. So, I’m looking at inverse ETFs to short it. There’s SARK that you can buy, which is then shorting ARKK itself.

Shay is convinced the Tuttle Capital Short Innovation ETF has a 20% upside from here. She’s dovish on tech at large and expects the Nasdaq Composite to return to the pre-COVID levels in the coming months.

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