Coinbase's lackluster performance after going public, with Ark Invest unafraid to double down with an additional billion investment, as founder is asked about target price: "Buy on the dip and you'll be fine."

Coinbase officially listed on Nasdaq on the 14th, although it briefly surpassed $400 but has since been declining, falling well below the opening price. Despite this, Ark Investment Management has entered the market for two consecutive days, and founder Cathie Wood has revealed the reasons in an interview.

Volatility on Listing Day for $COIN

As previously reported, the reference price for Coinbase's direct listing was set at 250; FTX's predicted market price before listing was 580.

Ultimately, COIN opened at 381, surged to a high of 428, then continued to decline, reaching 325 at the time of writing. Even based on the opening price, the drop has amounted to 14.58%.

Views from Traditional Investment Institutions

BTIG analyst Mark Palmer is quite bullish on Coinbase, initiating coverage with a "buy" rating. He views Coinbase as a leader in the industry, akin to the performance of Tesla, Zoom, and Snowflake in their respective sectors, with unlimited growth potential, and has set a target price of 500.

Asset management firm D.A. Davidson analyst Gil Luria had a pre-listing target price of 440, and according to Fortune, he has now raised the target price to 650. Apart from believing that Coinbase has adopted a "regulation-friendly" strategy, he points out:

Holding Coinbase stock is like holding a basket of crypto assets, it doesn't matter which cryptocurrency wins, you don't have to figure that out. For investors unfamiliar with cryptocurrencies, this is a great way to invest in the field.

Ark Invest Makes Significant Purchases

On Coinbase's debut day, Ark Invest's three funds collectively bought nearly 750,000 shares, valued at approximately $246 million at the current price.

Two-thirds of the shares are held by the flagship fund "Ark Innovation ETF," with the remainder split between the "Ark Next Generation Internet ETF" and the "Fintech Innovation ETF."

Then on Thursday, 4/16, Ark Invest added 341,186 shares, about $110 million, allocated as follows:

• Genomic Revolution ETF ARKG: 282,000
• Fintech Innovation ETF ARKF: 33,000
• Autonomous Technology & Robotics ETF ARKQ: 25,000

Ark Invest's holdings within two days have exceeded 1 million shares, totaling 1,090,391, valued at $352 million. Ark Invest founder Cathie Wood discussed their operations so far this year in an interview with Bloomberg.

She claims that the performance of innovative tech stocks has continued from last year, showing strong performance early this year, and subsequent declines have not altered their strategy. She expects significant volatility ahead but emphasizes:

We are not looking for a 15% annual return on investment; we will follow Ark's five-year investment strategy, aiming for over a 25% annualized return.

Reasons for Entering Coinbase

When asked about the target price for Coinbase, she stated:

I won't give a target price, but it will definitely be far above its opening price. Why is it so volatile? Just look at the Bitcoin chart, and you'll understand. In the next five years, we believe this is truly an excellent opportunity to buy on dips.

Why the high regard for Coinbase? Cathie Wood again referenced Ark Invest's annual report "Big Ideas 2021" and the predicted price after institutional entry, where Bitcoin is projected to reach $500,000, benefiting Coinbase.

Unable to elicit a target price, the host asked if she could provide an expected return on investment. Cathie Wood indicated that it would be significantly higher than Ark's minimum expected return of 15%, but also anticipates significant volatility, viewing it as a long, exciting journey.