• October 6, 2022

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Topline

New York City investment firm Ark Invest, helmed by high-profile stock picker Cathie Wood, offloaded a large chunk of top-holding Pfizer on Wednesday and poured into rival vaccine-maker Moderna, which has far underperformed the former over the past year.

Key Facts

According to Ark’s daily transaction reports, the firm’s $2.6 billion Genomic Revolution ETF, which mostly invests in healthcare companies “expected to substantially benefit from enhancing the quality of life,” sold 152,823 shares of Pfizer for about $8.2 million on Wednesday and spent nearly $26 million buying 172,939 shares of Moderna, which it did not previously hold.

The transaction marks the firm’s first Moderna purchase in at least one year; it’s also Ark’s first Pfizer sale since March, it now holds about 582,000 shares which are worth $31.1 million as of Wednesday.

Ark’s purchase fell on the same day Moderna announced it’s hoping to launch a new Covid booster—targeting both the original coronavirus strain and omicron variant—this fall after promising early results from clinical trials; Pfizer has said its omicron booster could also be available later this year.

Shares of Pfizer and Moderna, which have led development of the two most widely used Covid-19 vaccines, skyrocketed 60% and 140%, respectively, last year as the shots became widely accessible, but both stocks have fallen victim to the overall market demise as the Federal Reserve raises interest rates; Moderna has been hit especially hard with shares down 40% in 2022.

Moderna’s drop has wiped out some $100 billion in market value, while Pfizer’s down nearly 6%; meanwhile, Ark’s Genomic Revolution ETF has cratered 48%—far worse than the S&P 500’s 14% decline.

ARK did not immediately respond to Forbes’ request for comment.

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Tangent

Moderna’s not the only recently struggling stock Ark has plowed into this week. Though it’s offloaded hundreds of millions of dollars in Tesla stock this year, Ark has been slowly adding back to its position in the electric-vehicle maker following a more than 40% decline this year.

Key Background

Covid-19 vaccines have proven to be highly effective in preventing the spread of illness—and have also been a massive boon to businesses heading up their development. Pfizer posted $81.3 billion in revenue last year, nearly doubling from $41.7 billion one year earlier, and Moderna nabbed $18.5 billion—dwarfing sales of $803 million in 2020. The booming vaccine business has been particularly good to the company’s top executives. Pfizer CEO Albert Bourla made $24 million in total compensation last year, up from $21 million in 2020 and $17.9 million in 2019, and Moderna Chief Stéphane Bancel made $18.2 million, up from $12.9 million and $8.9 million in the two years prior.

Further Reading

‘Give Us Five Years’: Cathie Wood Defends Struggling Tech Stocks As Flagship Fund Craters (Forbes)

Cathie Wood’s Ark Fund Plunges To Two-Year Low As Teladoc Stock Crashes, Tesla Slips Again (Forbes)

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