ARK Invest's Cathie Wood buys $45 million of Robinhood shares despite brokerage's lackluster debut

Published Fri, Jul 30 20217:35 AM EDT

ARK Invest' Cathie Wood scooped up shares of retail investing disruptor Robinhood during its disappointing Nasdaq debut Thursday. Wood purchased 1,297,615 shares of Robinhood in ARK Innovation , a position worth roughly $45 million based on the trading app's closing price of $34.82 per share. Robinhood only accounts for 0.2% of ARKK. Shares of Robinhood started trading on the Nasdaq on Thursday in one of the most highly anticipated IPOs of the year. The online brokerage started trading at $38 per share, the low end of its range, valuing the company at roughly $32 billion. After dropping more than 8% and ending the session at $34.82, Robinhood's market capitalization was about $29 billion. Wood — an innovation investor — likely saw Robinhood as a disruptor, since it pioneered free trading and forced the brokerage industry to drop commissions in 2019. Wood often says that the constituents in her flagship fund, ARK Innovation, are her highest conviction names, a major vote of confidence for HOOD. Wood has garnered a large fan club after ARK Innovation returned nearly 150% last year. The hot-handed investor gets much of her attention from a younger demographic that she said appreciates the place innovation has in the world today. "The millennials and the Gen Z's...they love learning," Wood said following the GameStop trading mania . "They're really excited about the new technologies that are evolving today, they're really at the leading edge of them." Amid an influx of retail investors into the stock market during the pandemic and trading manias like what took place in GameStop in January, the influence of these new traders is drawing scrutiny. "A lot of regulators and people in the investment business are concerned that we're going to hurt the little guy here by allowing this kind of behavior," Wood said. "Don't underestimate this group of people, they are actually more progressive than I think institutional investors are. They might speculate on Robinhood but the beauty of what's going on is they're going to learn very quickly because losses impact psychology and sentiment much more than gains do."

Baiju Bhatt and Vlad Tenev pose in Times Square on Robinhood Markets IPO Listing Day on July 29, 2021 in New York City.

Cindy Ord | Getty Images

ARK Invest' Cathie Wood scooped up shares of retail investing disruptor Robinhood during its disappointing Nasdaq debut Thursday.