Ark’s flagship ETF is crashing but Wood is doubling down, increasing her stake in her firm and betting on tech outfits like Tesla, Zoom and Coinbase to eventually rebound.

Cathie Wood became a cult hero in 2020 for a generation of investors raised on the mantra that stocks only go up, but this year has been a swift and painful reality check for her Ark Invest and its loyal disciples.

An early acolyte of Elon Musk and Tesla, Wood steered Ark expertly through the turbulent early months of the pandemic, and her flagship Ark Innovation ETF rose 157% in 2020. When Musk first became the richest person in the world in early 2021 after Tesla surged more than eightfold the previous year, Wood was riding high as a “disruptive innovation” evangelist, with investors piling into her funds.

Ark’s woes started shortly after that. Large holdings like Zoom, Roku and Teladoc Health struggled in 2021 after benefitting from overexuberance toward stay-at-home stocks in 2020, and the Ark Innovation ETF retreated 23% last year, even as the S&P 500 gained 27%.

This year’s bear market has been much worse, and Ark’s concentrated portfolio of tech stocks is taking the worst of it. The Ark Innovation ETF has crashed 60% this year, nearing its March 2020 low point, and the firm’s assets under management in all of its ETFs declined from a peak of more than $60 billion in February 2021 to $16 billion by the end of April. Based on that asset slump and stock declines for publicly traded asset managers like T. Rowe Price and WisdomTree, Wood is dropping off Forbes’ list of America’s richest self-made women this year.

Her estimated net worth of $140 million is sharply down from $400 million last year and falls well short of the $215 million cutoff to make this year’s top 100. Forbes estimates that her majority ownership stake in her firm is worth about $125 million. The rest comes from our estimates for her own cash invested in Ark’s funds and in separate cryptocurrency investments–she has predicted that bitcoin’s price will surpass $1 million by the end of the decade–and her personal real estate.

Wood’s public persona hasn’t been chastened by the reversal in fortunes. Last December, she predicted that Ark would return 40% annually over the next five years. As her losses deepened, she doubled down in April at a conference in Florida, saying Ark would rebound and gain 50% a year. She set a $4,600 price target for Tesla shares by 2026, implying a near-$5 trillion valuation and a 500% gain from its current price, and last week, Wood said she even plans to start a “crossover fund” that would invest in private companies.

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None of the bravado has helped in the short term. As the S&P 500 entered a bear market on Monday, 22% down from its peak, the Ark Innovation ETF also closed at a low point. Coinbase, Robinhood and Roku have all lost well over half of their values this year, and even Ark’s crown jewel Tesla is down 39%. Wood has been buying more of Zoom, down 44% this year and more than 80% since its fall 2020 peak, and the video communications firm is now the Ark Innovation ETF’s largest holding.

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Morningstar downgraded its rating on the Ark Innovation ETF to negative from neutral at the end of March, citing poor risk management, its increasingly concentrated portfolio, Wood’s reliance on her instincts and the firm’s apparent lack of succession planning for the 66-year-old Wood. Ark did quietly promote two analysts to associate portfolio managers in late May, though Wood still serves as the CEO, chief investment officer and clear face of the firm.

She, for one, is not backing away. “We have continued confidence in the long-term outlook for ARK and its ability to expand its strategies into additional geographies, markets, and business lines,” an Ark spokesperson said in a statement. “Importantly, this confidence is exemplified by Cathie Wood increasing her equity ownership in ARK…Along with ARK’s Founder and CEO, 97% of ARK employees recently increased their personal ownership stakes in the firm, highlighting their conviction in our belief that ARK is on the right side of change and that we and our investors will be rewarded handsomely.”

At a valley in the roller coaster, Wood’s investors haven’t jumped off the ride either. The Ark Innovation ETF has seen more than $1 billion in inflows this year, though Ark’s other eight ETFs have had outflows largely offsetting that amount. The Ark Innovation ETF has sprouted a slew of products that either amplify or sell short its holdings, an ecosystem that Morningstar analyst Robby Greengold cites as a possible source of continued investment in the fund, and risk-taking investors have kept trying to buy the dip.

“This might be people doubling down, people being unwilling to lock in their losses,” Greengold says. “And I think there’s probably something to be said about Cathie Wood’s charisma and her continuous presence in publicly available webinars, YouTube videos and also in the media. She seems to inspire a lot of confidence in retail investors.”

That’s been true for some time. Shares of the Ark Innovation ETF have declined in value since the end of 2019, but the fund’s $7.9 billion in assets as of last Friday is far more than the $1.9 billion it had back then, according to YCharts. The additional assets have come from investors who bought into the frenzy since 2020 and lost money riding it all the way down. Many are giving her the time and the trust to make it back for them.

For now, she still has a large enough war chest to be patient in hopes of a turnaround, with a fortune of nearly $150 million that’s nothing to scoff at. Her business generates plenty of revenue, charging modest 0.75% annual fees on its assets, and also partners with foreign issuers like Japan’s Nikko Asset Management using Ark’s strategies for around $10 billion additional assets classified as non-discretionary.

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