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  5. ARKK: Hi there, ARKK has dropped very dramatically - about 75% to 80% from all time highs. [ARK Innovation ETF]
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Q: Hi there, ARKK has dropped very dramatically - about 75% to 80% from all time highs. I believe the 2000 .com bust had a similar fall in terms of percentages. In your opinion, has ARKK bottomed out here? Do you think it's time to finally start buying in the $40 to $45 price range? Lastly, do you see comparisons in buying ARKK today, similar to buying oil in March 2020 after oil went negative and XEG etc collapsed? Thanks!

Asked by Michael on May 20, 2022
5i Research Answer:

We believe that ARKK today is similar to oil in March 2020 in that both are/were unpopular trades. ARKK has been heavily sold off over the past year, and while we would not expect much of a recovery in the near term, we feel that most of its underlying companies have decent fundamentals and solid network effects. We believe that it may take a long time to recover, but that a lot of the names have been heavily sold off, and we would like to continue assessing the underlying companies' earnings before stepping in here.