Tesla bull ARK Invest added 2,800 shares of the electric automaker’s stock on Monday morning, equating to a roughly $1.8 million investment. Tesla shares were up over 2 percent just after noon on Tuesday in New York, rebounding from a tough five-day stretch last week where shares dropped roughly 10 percent.
ARK added the Tesla shares to its ARKQ Exchange Traded Fund (ETF), which is comprised of companies in Autonomous Technology and Robotics. The investment represents 0.1576 of the fund, and was joined by two other transactions in the ETF: the sale of 1,274 shares of Elbit Systems Ltd, and 22,274 Aerovironment Inc.
ARK also holds Tesla shares in its Innovation ETF, known as ARKK.
It appears ARK took advantage of a slight dip in Tesla stock, which occurred last week after a rough week for many automakers and tech stocks. Yesterday, Tesla shares dropped over 7 percent as CEO Elon Musk sent an email to company employees stating they will have to “rally hard to recover” from shutdowns that occurred this quarter in Shanghai at Tesla’s factory. The facility was shut down for three weeks amidst a spike in COVID-19 cases in China in April, which eliminated 97.7 percent of Tesla’s production in April compared to March.
ARK has regularly supported Tesla’s thesis as a company, especially in terms of its robotaxi and self-driving projects. ARK suggests Tesla shares could reach $4,600 by 2026, with its bull case surging the automaker’s potential stock price up to $5,800. ARK also has a bear case that puts Tesla’s stock at $2,900.
Tesla stock is still up nearly 6 percent on the year, but has battled plenty of shortcomings in terms of manufacturing and other news this year. Not only has Tesla battled with a lengthening order bank, but it has also combated parts shortages and, as previously mentioned, shutdowns of its factories during the first half of the year. Knowing that Tesla has a legitimate chance to miss out on quarterly growth for the tenth consecutive time in terms of vehicle deliveries and production numbers, investors may need to brace for a tough few days following the publishing of the Q2 delivery figures.
However, Tesla has plenty of positive news as it continues to expand its manufacturing footprint with reports of new factory locations in North America being considered. Additionally, the automaker has fully recovered from the Shanghai shutdown, according to Musk.
Tesla announced last week it would propose a 3:1 stock split to investors at this year’s Annual Shareholder Meeting.