Cathie Wood Just Bought Over $1 Million of This Stock -- Should You Follow Her Lead?
In May, Cathie Wood's ARK Investment purchased over 140,00 shares of Robinhood Markets (NASDAQ: HOOD) in its ARK Fintech Innovation ETF. Considering Wood's penchant for innovative and (seemingly) market-disrupting companies, her interest in Robinhood isn't surprising. ARK's investments are no stranger to roller-coaster rides.
When Robinhood had its initial public offering (IPO) in July 2021, its stock price increased by over 55% within a week. It's now down close to 82% since its August 2021 peak. This year is going better, with the stock up over 19% year to date, but does that mean you should follow Wood's lead? Probably not. Let's see why.
While many companies have suffered under higher interest rates, Robinhood has greatly benefited from them. When customers keep cash in their Robinhood accounts, Robinhood keeps the cash in one of its partner banks. Since interest rates have increased, so have the yields on savings and other deposit accounts.
Source Fool.com
