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Cathie Wood claims she isn’t worried about a “big short” on her flagship exchange-traded fund, ARK Innovation.
On Tuesday, the relentlessly bullish tech investor responded to a report that Michael Burry — the eccentric, California-based investor who famously reaped a windfall betting against the housing market in 2008 — was now betting against her high-flying fund.
Burry rose to prominence after Michael Lewis featured him in his 2010 book “The Big Short,” later made into a 2015 movie of the same name in which he was portrayed by Christian Bale as a quirky, doggedly contrarian genius.
“To his credit, Michael Burry made a great call based on fundamentals and recognized the calamity brewing in the housing/mortgage market,” Wood posted on her Twitter account. “I do not believe that he understands the fundamentals that are creating explosive growth and investment opportunities in the innovation space.”
On Monday, Burry revealed his fund, Scion Asset Management, had purchased $31 million worth of puts — a bet that Wood’s fund will go down — against ARK in the second quarter. While Burry has never directly criticized Wood, he has been critical of the Reddit and retail traders — many of whom follow Wood closely.
In June, Burry tweeted that cryptocurrencies, meme stocks, and Redditors will lead to “the mother of all crashes.” He has since deleted his Twitter account.
Wood’s growth-focused funds are a hot item among short sellers. And in recent days, short interest in ARKK has reached a record high of more than 11 percent, according to financial data firm Koyfin.
ARKK is up 30 percent year over year but has dropped around 8 percent in 2021 as Wood’s earlier bets on Chinese tech stocks were crushed.
Wood’s strategy is to buy up “disruptive technology” stocks and heavily invest in a few pricey stocks like Tesla and Teledoc health.
Still, Wood is optimistic that the fund’s success will continue. “The bull market has strengthened, setting the stage we believe for another leg up in innovation strategies,” she said in a Twitter post defending her fund.
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