Very bad news for Cathie Wood’s ARKW, ARKF, ARKF and ARKQ ETFs

By:
on May 30, 2024
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  • Cathie Wood’s ETFs have seen substantial outflows in the past few years.
  • Most of these ETFs have underperformed the Nasdaq 100 and S&P 500 indices.
  • UiPath, a top companies in her ETFs has plunged by over 34% in pre-market.

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Cathie Wood’s business has received a dose of bad news as the earnings season wraps up. Most of its Exchange Traded Funds (ETFs) have shed substantial assets after years of underperformance. For example, the ARK Innovation Fund (ARKK) has lost billions of dollars and now has over $6.8 billion in assets. At its peak, it had billions of dollars in assets under management.

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ARK ETFs have seen substantial outflows 

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The same is true with the ARK Autonomous Tech & Robotics (ARKQ) and ARK Fintech Innovation ETF (ARKF), which have continued to underperform the broader S&P 500 and Nasdaq 100 indices.

The bad news to watch on Thursday is that one company that exists in ARKK, ARKW, and ARKF ETFs reported weak financial results, pushing its stock sharply downwards in the extended hours.

ARKW vs ARKK vs ARKF vs ARKQ

ARKW vs ARKK vs ARKF vs ARKQ

UiPath (NYSE: PATH) stock price plunged by over 34% and reached its lowest level since January 2023. It has now plummeted by over 56% from its highest point this year and by more than 86% from its all-time high. It is now hovering near its all-time high while its market cap has tumbled from over $44 billion to less than $10 billion.

UiPath’s stock price tumbled even after the company published encouraging financial results. Its revenues rose by 16% in the first quarter to over $335 million while its Annual Recurring Revenue (ARR) soared by 21% to over $1.5 billion. 

Still, the company warned that its business saw “increased deal scrutiny and lengthened sales cycle” signalling that its business was slowing down. It now expects that its revenue will be between $300 millon and $305 million in the second quarter. For the year, it sees its revenue growing to between $1.40 billion and $1.41 billion.

UiPath stock chart

UiPath stock chart

UiPath will replace its CEO

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In addition to its slow growth, the stock crashed after the CEO, Rob Enslin, stepped down. He will be replaced by Daniel Dines, the former founder and the former CEO of the company. In most cases, such CEO transitions signal that a company is not doing well and that it needs a turnaround strategy. We have seen that with companies like Starbucks and Disney.

UiPath is an important company in Cathie Wood’s portfolio since it is a component in most of her ETFs. It is the fifth-biggest company in the Ark Innovation Fund after Tesla, Coinbase, Roku, and Block. The fund has over 18.6 million shares worth over $349 million.

UiPath is also the fifth biggest company in the ARKQ ETF after Tesla, Teradyne, Kratos Defense & Security, and Iridium. It is the sixth biggest constituent of the ARK Fintech Innovation ETF (arkf) after Coinbase, Shopify, Block, DraftKings, and Robinhood. Also, the company is the eighth biggest part of the Ark Next Generation Internet ETF (ARKW).

Cathie Wood loves UiPath because of its role in corporate America. The company provides enterprise automation and AI solutions to companies like Wells Fargo, Orange, Merck, and Siemens.

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