Space stocks jump as investors gear up for Ark Invest's next big play

Published Thu, Jan 14 20219:18 AM ESTUpdated Thu, Jan 14 20214:03 PM EST

Shares of space stocks are popping as investors hope Ark Invest's new space ETF achieves the same explosive growth as Cathie Wood's other disruptive funds. Ark Invest, which runs the largest actively managed exchange-traded fund, plans to add a "Space Exploration ETF," a securities filing showed on Wednesday . While the ETF's members have yet to be announced, shares of the publicly traded space companies are already soaring in hopes that Wood's new investment idea pays off the same way Ark's other ETFs have. Shares of commercial spaceflight pure play Virgin Galactic surged 19.9% and satellite communications stock Maxar Technologies jumped 19.6% on Thursday. Shares of Globalstar popped 9.3%, ORBCOMM gained 10.1% and Loral Space and Communications rallied 13.9%. ViaSat and Iridium Communications rose 9.4% and 8.7%, respectively. To be sure, this is quite an unusual phenomenon to have specific stocks surging this magnitude just because a notable investor is opening a fund in the space. It may speak to the speculative environment of the market these days, where some investors blame Federal Reserve stimulus and retail trader participation for driving valuations to sky-high levels. But it also is a reflection of Ark's breakout year in 2020, where its flagship fund, ARK Innovation, returned nearly 150%. Investors stampeded into the fund to the tune of about $11 billion in inflows in the last year. ARKK is now the largest actively managed ETF. The fund's assets under management have ballooned to more than $21 billion, according to FactSet, with more than $3 billion in the last month alone. Remarkable gains from Tesla, Square, Teladoc and many other winning constituents helped the fund surrounding "disruptive innovation" reach its current levels. Space investing Pure plays are scarce in the estimated $400 billion space economy that is still largely dominated by large aerospace and defense companies, serving government-funded interests. However, company's like Virgin Galactic and Maxar Technologies are looking to change that. The Space Exploration ETF would focus on companies that are "leading, enabling, or benefitting from technologically enabled products and/or services that occur beyond the surface of the Earth," the filing said. The fund is focusing on four types of space companies: orbital aerospace companies, suborbital aerospace companies, enabling technologies companies and aerospace beneficiary companies," according to the SEC filing. Ark's founder and CEO, Wood, a long-time Tesla and bitcoin bull, told CNBC in December that 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." Ark has several other actively managed ETF's that are garnering attention with high levels of inflows as well. The ARK Next Generation Internet fund is up more than 150%, the ARK Autonomous Technology ETF is up nearly 120% and the ARK Fintech Innovation ETF is up about 105% in the past 12 months. ARK Invest's ARK Genomic Revolution ETF is up more than 200% in the past year and up more than 13% this year alone. Ark's new ETF will trade under ticker ARKX. — with reporting from CNBC's Michael Sheetz.

Virgin Galactic's First Spaceflight on Dec. 13, 2018

Source: Virgin Galactic

Shares of space stocks are popping as investors hope Ark Invest's new space ETF achieves the same explosive growth as Cathie Wood's other disruptive funds.