Cathie Wood, founder of Ark Invest, has made a significant investment in online education platform 2U Inc (TWOU), acquiring over a million shares last week. The purchase has garnered attention in the investment community and is worth examining closely.
Wood’s investment in 2U Inc was split between three of Ark’s exchange-traded funds (ETFs), with the majority being secured through Ark Innovation. In this fund, Wood acquired more than 800,000 shares of the company. Additionally, Ark Next Generation Internet acquired just under 150,000 shares, while Ark Autonomous Tech and Robotics added 110,568 shares to its portfolio.
However, despite the investment, Ark’s stake in 2U Inc remains one of the smallest among the three funds. Ark Innovation now owns a total of 6.7 million shares of 2U Inc, valued at just over $20 million and accounting for a weight of 0.26% in the fund. Next Generation Internet owns a modest 1.2 million shares, and Ark Autonomous Tech and Robotics hold 722,608 shares.
The performance of 2U Inc’s stock has been on a steady decline in recent years. In September 2018, it reached a trading value of nearly $90 per share, peaking at $55 in February 2021. Unfortunately, the trend has been consistently downward since then, hitting a 52-week low of $13.15. On Wednesday, the stock experienced a significant drop of 24% following an unimpressive earnings report.
According to the report, 2U Inc suffered an 8% decline in revenue compared to the previous year, totaling $222.1 million. This led to an adjusted net loss of 18 cents per share, surpassing analysts’ predictions of a loss of seven cents per share and anticipated revenue of $234 million.
Wood’s investment in 2U Inc raises questions about the company’s future prospects and its ability to turn around its declining performance. Investors and industry experts will be closely monitoring the impact of Wood’s investment on the company and whether it can regain its momentum in the online education sector.