Cathie Woods’ ARK Invest latest stock pick includes a meme stock that is Cloudflare (NYSE: NET).
Just this week, an ETF linked to ARK Invest’s stock-picking ability is pitted against one holding equities popular among online-investing forum users. Their tactics are entirely different, but they both want to exceed the competition. However, it won’t be long before one strategy triumphs over the other.
The ARK Transparency ETF (CTRU), the ninth ARK Invest ETF for investors, began trading on Wednesday. Its goal is to own the top 100 most transparent and honest firms about their business practices. Then there’s the Roundhill Meme Stock ETF (MEME), which holds 25 of the most popular stocks on social media and has a lot of short interest. It launched on Wednesday as well.
“The (MEME) ETF provides a diversified way of owning companies that are in demand by retail investors, but are out of favor with institutional investors,” said Todd Rosenbluth, head of ETF and mutual fund research at CFRA.
A snippet of Cloudflare (NET)
Cloudflare, Inc. is a web infrastructure and website security company based in the United States specializing in content delivery networks and DDoS mitigation. Its services function as a reverse proxy for websites between a visitor and Cloudflare customer’s hosting provider. The company is based out of San Francisco.
With a 1.4 percent stake, the cloud-based computing company is ARK Transparency’s fifth-largest asset. It’s been a strong performer so far this year, more than doubling in value. However, it has recently been knocked down by a meme stock fall. In the last month, shares have lost almost a fifth of their value.
Both ARK and meme investors, on the other hand, are optimistic about the company’s prospects. Cloudflare is expected to lose another five cents per share in 2021, or $1.5 million adjusted, before making a two-cent profit in 2022.