There’s a new psychedelics company being added to an ETF from Cathie Wood.
What Happened: The Ark Genomic Revolution ETF (BATS:ARKG) took an initial position in shares of psychedelics company Atai Life Sciences (NASDAQ:ATAI) Tuesday.
The ETF purchased 83,278 shares of ATAI, representing around 0.01% of assets in the fund. The stock ranks in the lowest position of the 53 stocks owned by the ETF.
Atai was the third psychedelics company to go public with an IPO in June 2021, following Mind Medicine Inc (NASDAQ:MNMD) and Compass Pathways (NASDAQ:CMPS).
Atai is developing treatment options for mental health disorders with 10 programs in its pipeline.
Related Link: Benzinga Asks: Which Ark Fund Would You Rather Buy
Why It’s Important: The Ark Genomic ETF is one of the most well-known funds in the biotech sector. Despite being down 34% over the last year, the ETF is still up over 39% over the last three years.
Atai is backed by Peter Thiel, the co-founder of Palantir Technologies (NYSE:PLTR). Wood is heavily invested in Palantir, with the stock making up a 2.6% stake in the flagship Ark Innovation ETF (NYSE:ARKK), with a $313 million position.
Neither Mind Medicine of Compass has been added to ARKG, suggesting Atai could be the preferred psychedelics play by the ETF manager. Atai also owns a stake in Compass, which could make it a way to play the success of both companies.
Price Action: ATAI shares are up 14% to $5.75 on Wednesday.
For more on psychedelics stocks, check out the first Benzinga Psychedelics Capital Conference live in Miami, Florida, on April 19, 2022.
