1/ @CathieDWood is in a dire liquidity trap w/ 18 of her positions worth $9.6bn (19% of NAV). Japan's Nikko paid ARK to mimic $ARKK & sell it in Japan. What shows up as Nikko's positions are often held in equal size by Sumitomo Mitsui. This amplifies ARK's exposure by 1.8x
2/ This is a list of ARK's 18 most illiquid holdings, in terms of the # of trading days it would take ARK to exit its position based on avg 30-day volume. $MTLS is a great example: ARK's stake alone would take 18 days to sell. Add Nikko + Sumitomo & now it's 30 days of volume.
3/ @ARKInvest is so bad at risk management that it invited Nikko to add to positions in which ARK was already oversized. This creates a circular firing squad, where $ARKK selling spurs Nikko selling & vice versa. ARK's biggest ownership stakes (LEFT); Nikko's (RIGHT).
END/ The avg PBR of these 18 oversized $ARKK positions is 9x & only 5 are forecast to be profitable in 2023. Stocks like $MTLS, in which ARK faces the biggest liquidity trap, have been struggling for years. Some, like $CERS are held by savvy biotech investors like Baker Bros.
