Ark Invest’s Space Exploration ETF ARKX Begins to Trade and Already Falls 1%

The highly anticipated new space exploration ETF from Ark Invest, began its trading debut in the market on Tuesday.

The ARKX ETF is the brainchild of Cathie Wood’s firm and is aiming to tap into the growing space industry.

Ark analyst Sam Korus has told CNBC’s Morgan Brennan on “Power Lunch” that “Space is
already an invisible backbone to our economy and we think that’s only going to become more so.”

The ETF has 39 stocks that include pure-play space companies like Iridium and Virgin Galactic. It also has defense and aerospace companies such as Kratos, L3Harris, Lockheed Martin and Boeing.

The ETF additionally includes names not traditionally connected to the space industry, such Chinese e-commerce firms JD.com and Alibaba, or agriculture businesses like Trimble and Deere.

Shares of ARKX slipped a little more than 1% in its first day of trading, with the stock opening at $20.50 a share.

“We’ve all seen the memes going around on Twitter,” Korus said, referring to the concern of the holdings of the ETF.

“The fact that people are dismissing this out of hand is very reassuring to us, and kind of demonstrates the type of research that we’re doing and how we can be unique,” he added.
Korus offered Netflix as an example, which has a 1.25% weighting in ARKX.

“Netflix … has 200 million paying subscribers. In the U.S. alone, there’s over 40 million people who don’t have access to broadband and so, if a satellite solution can bring access to those customers and expand the addressable market and the topline for Netflix, then this is something that is very important,” Korus explained.

“I think with SPACs it’s important to remember that a lot these are almost at the pre-IPO stage,” Korus said. “We really want to be sure that we’re picking the winners long term, particularly in aerospace – where many companies do go bust and things get delayed.”

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.