Ark Invest has started a new space focused investment ETF called ARKX.
ARK Invest is famous for its ARK Innovation fund ARKK. Their largest holding has been Tesla and they have been the Tesla Bulls who correctly called Tesla going to $4000 pre-split back in 2017. Tesla is now at $845 per share which is $4225 pre-split.
ARK Invest will focus on the following areas in space.
They seek long-term capital growth by investing in domestic and foreign equity securities of companies focused on space exploration. What used to be a monopolistic and bureaucratic industry is being upended by both rocket and satellite cost declines. As a result of advancements within deep learning, mobile connectivity, sensors, 3D printing, and robotics, decades of ballooning costs have reversed trend and are beginning to decline, leading to a proliferation of satellite launches and rocket landings.
The companies starting in the ARKX have not been announced. Shares of space companies Virgin Galactic and Maxar Technologies each jumped more than 8% in after-hours trading yesterday and are up today.
ARK Innovation fund returning more than 170% in 2020 and growth in assets under management to $17 billion. Ark founder and CEO Cathie Wood has said investors should get on the right side of change and stay on the right side of change because it has hit escape velocity in the aftermath of the coronavirus.
In early 2020, ARK Invest had scenarios where there was a 25% chance that Tesla will be worth over $3,000 per share post-split. This would mean Tesla would be worth over $3 trillion.
Tesla surpassed the high functioning EV level. Tesla making gigafactories at half the cost per unit of the high functioning EV market scenario.
Nextbigfuture sees an ultra-functioning EV, high functioning battery and high functioning solar company.
Beyond cars adding in a continually improving autopilot. Autopilot FSD (although not fully autonomous) is the best driver assist. 30% of the people who buy Tesla now buy the autopilot at about $10,000 each. There is a growing share that buy the Tesla insurance for about $5000. We could see $15,000-20000 for the next version of Autopilot FSD which is bought by 60% of Tesla buyers and where Tesla insurance is bought by 80% of Tesla buyers. If there is 80% margin on the Autopilot FSD and 50% margin on the insurance then net income could double or triple.
Nextbigfuture believes that Tesla could have scenarios where they make a lot more factories by 2024. The factory production could be accelerated if Tesla can buy more factories from other automakers.
There is also the scenario where Tesla licenses technology to other carmakers and gets per unit cash without having to pay for factories.
NOTE: Author of this summary and commentary, Brian Wang of Nextbigfuture owns shares of Tesla, ETF Trends, Ark InvestWritten by Brian Wang.