Cathie Wood and her Ark Invest purchased TSLA stock for the first time since late April, picking up more than 100,000 shares Wednesday. That comes as Tesla appears to be facing mounting pressure from regulators after a Reuters report found the EV giant has been dealing with suspension and steering failures for years. TSLA stock rose Thursday.
Cathie Wood's Ark Investment Management bought 111,387 TSLA shares Wednesday, according to the company's daily trade disclosure. Based on the closing price of 247.14, Wood spent $27.53 million on the Tesla stock purchases.
Wood's Tesla trades were done through the ARK Innovation ETF and ARK Next Generation Internet. As of Dec. 21, TSLA sits third in ARKK with a 7.33% weight. Meanwhile, Tesla stock is the sixth ranked holding in ARKW, with a 4.75% weight.
The Cathie Wood decision to purchase Tesla stock comes after she has repeatedly sold TSLA in the past eight months. Early in 2023, Wood pounced on Tesla as the stock traded below its 200-day moving average.
Wood, who has been bullish on Tesla for many years, will speak with Tesla Chief Executive Elon Musk on X Spaces after the market closes Thursday.
Tesla stock advanced 3% to 254.60 Thursday during market action. In December, TSLA has angled 6% higher, finding support at its 10-day moving average.
Tesla Faces Potential Recall
On Tuesday, TSLA stock sank 3.9% to 247.19 amid a market sell-off. Also, Reuters reported that tens of thousands of Tesla owners have experienced suspension and steering failure, dating back at least seven years.
The EV giant has more detailed knowledge about vehicle defects than it has disclosed to the public or regulators, according to Reuters. Tesla often blamed drivers for problems despite knowing of faulty parts.
On Thursday, Reuters reportedly Tesla is facing an inquiry by Norway's traffic safety regulator into the suspension failures, which could result in a recall. The Norwegian regulators began looking into Model S and Model X issues in September 2022.
The safety agency told Reuters it could recommend Tesla recall all Model S and Model X vehicles to replace rear lower control arms. They also could extend the probe or take no action. The regulators are expected to announce a verdict by Christmas, according to the report.
Cathie Wood: Tesla Stock Performance
TSLA shares sank after the EV giant reported worse-than-expected Q3 earnings and revenue on Oct. 18. However, Tesla stock is building the right side of a double-bottom base giving it a 278.98 buy point, according to MarketSmith analysis.
Tesla stock rose 4% last week, slightly topping the Nov. 29 high of 252.75 as an early entry. Shares have been trading around that level this week.
So far in 2023, Tesla has gained around 100%, easily outperforming the broader S&P 500 index.
Tesla ranks fourth in the 35 member IBD Automaker industry group. The S&P 500 component has an 81 Composite Rating out of a best-possible 99. The Cathie Wood-backed Tesla also has an 82 Relative Strength Rating and an 88 EPS Rating.
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