5 Hedge Funds Betting Against Cathie Wood’s ARK Innovation ETF

2. Taconic Capital

Taconic Capital is a New York-based hedge fund led by Frank Brosens with a portfolio value of more than $3 billion. Latest filings show that the fund owned PUT options against 910,000 shares of ARK Innovation ETF (NYSE: ARKK) at the end of the second quarter of 2021 worth $119 million, representing 3.77% of the portfolio. It is placed second on our list of 10 hedge funds that are betting against Cathie Wood’s ARK Innovation ETF.

Frank Brosens of Taconic Capital

Taconic Capital has invested heavily in The Walt Disney Company (NYSE: DIS), a California-based mass media and entertainment firm. At the end of the second quarter of 2021, 112 hedge funds in the database of Insider Monkey held stakes worth $10.8 billion in The Walt Disney Company (NYSE: DIS), down from 134 in the preceding quarter worth $12.5 billion. 

In its Q4 2020 investor letter, Harding Loevner, an asset management firm, highlighted a few stocks and The Walt Disney Company (NYSE: DIS) was one of them. Here is what the fund said:

“One of the original constituents of the Nifty Fifty holds a place in our portfolio today. When we bought Disney three years ago, we wrote that “we view Disney theme parks in the US, Europe, and China as resistant to online substitution.” We did not reckon on a pandemic, which closed all of them, and sent all of us to our couches. Disney, however, was ready for us, brilliantly illustrating the importance of management foresight and change management. Or, as Louis Pasteur said, “chance favors the prepared mind.

A century after its founding in 1923, Disney is in the middle of a bold shift from its legacy media networks & entertainment model—with cable TV, theme parks, and theater films dominating its earnings—to a direct-to-consumer streaming media model. The keys to Disney’s transition: matchless storytelling, coupled with financial strength. The company reliably creates content that people all over the world are eager to consume. It also hastened spending on original content to attract subscribers to its new streaming platform. These factors have allowed Disney to weather the pandemic having expanded its direct engagement with customers. Such connections yield a rich harvest of insights used to customize offerings on a mass scale, reinforcing that engagement in a virtuous circle and thereby raising the lifetime value of each customer. Subscribers to Disney+ reached 86.8 million one year after launch, compared to the 60 – 90 million management projected to reach in 2024. To be sure, Netflix, Apple, and Amazon remain formidable competitors in new-era streaming entertainment (mind what we said about everyone standing up at once), but there’s fight left in this old dog.”