FAST FIVE: Morning Wood: Space Stocks Take Off After ARK Files For Space-Themed ETF
On Wednesday, the firm filed to launch a space exploration ETF, immediately sparking a rally in space-themed names in Wednesday's after market session and Thursday's pre-market and morning session.
The ETF “will primarily track US and global companies engaged in space exploration and innovation,” according to the filing. Space related names rose on the news in early pre-market trading on Thursday, with stocks like Maxar and Virgin Galactic catching a bid in hopes of frontrunning the eventual bid that will come from the ETF. The rally continued during the morning session, with names like Gogo and Viasat also catching bids.
Space Stocks pre-mkt: ️ $MAXR +16% $SPCE +12%$SRAC +23%$NPA +15%$VSAT +6.0%$IRDM +7.0% reacting to ARK Space ETF creation: $ARKX – Special Sits (@rosemontseneca) January 14, 2021 Just hours ago, we noted how short interest in ARK's flagship fund had exploded, as investors were turning to bet against Wood via her fund's flagship ETF.
There are, quite literally, traders who have screens for 'ETFs that went up X far over Y time' to use as contrarian short indicators.” ETF expert Eric Blachunas commented: “The Ark phenomenon is the first time ever that a rock-star portfolio manager has been shortable. Typically, they're in a mutual fund or a hedge fund, which you can't short.
The massive volume in ARK's funds has continued from 2020 into 2021, as Balchunas had predicted late last year when he pointed out several reason the fund could actually become a victim of its own bloated size.