"Why Buy on a Day of Surging Stock Prices?"...Cathie Wood Makes $5.5 Million Follow-Up Purchase of Circle Shares

▲ Cathie Wood/AI Generated Image

Ark Invest, led by Cathie Wood, purchased $5.5 million worth of Circle Internet (CRCL) shares on the day the stock reached a two-month high. This purchase came after Circle's stock surged following its Q1 earnings announcement, notable because Ark increased its stake even amidst a rising stock price.

FXStreet reported on May 12 (local time) that Ark Invest bought 41,904 shares of Circle on Monday. The purchase was made through three exchange-traded funds (ETFs): Ark Innovation (ARKK), Ark Next Generation Internet (ARKW), and Ark Blockchain and Fintech Innovation (ARKF).

Circle's stock closed up 16% at $131.76 that day, its highest closing price since March 18. FXStreet stated that the stock surged after Circle announced earnings per share of 21 cents, exceeding market expectations. Circle was also mentioned as the issuer of USDC, the second-largest stablecoin.

Circle announced that it raised $222 million in the ARC token presale for Arc blockchain. This announcement, along with strong earnings, was presented as a factor supporting Circle's stock price increase.

Ark's purchase of Circle shares is its first since March 24. At that time, Ark bought $16.3 million worth of shares when Circle's stock plunged by 20%. Subsequently, on April 17, it sold $1.2 million worth of shares on a day when Circle's stock closed at approximately $106. FXStreet explained that Ark typically buys during periods of stock weakness to secure value and adjust ETF weightings, but large-scale purchases coinciding with significant stock price increases, like this one, are relatively rare.

This transaction occurred at a time when Circle's stock reached a short-term high, buoyed by strong earnings and news of funding related to the Arc blockchain. Unlike its usual practice of buying during downturns, Ark expanded its stake in Circle even on a day of strong upward momentum, increasing its exposure to Circle's growth potential as a stablecoin issuer and blockchain infrastructure company.

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