Ark Invest buys Block after shares fall

Ark Invest added about $21 million of Block Inc. shares across three exchange-traded funds on Thursday, buying into a sharp sell-off that pushed the payments company’s stock down 6.15% to $79 at the close.

Cathie Wood’s investment firm purchased 267,676 Block shares through the Ark Innovation ETF, Ark Next Generation Internet ETF and Ark Blockchain & Fintech Innovation ETF, according to Ark’s daily trading disclosure. The transaction increased Ark’s exposure to a company whose products span merchant payments, peer-to-peer transfers, bitcoin services and consumer finance through Cash App.

The purchase places Block at the center of Ark’s latest portfolio activity following a difficult trading session for the stock. At Thursday’s closing price, the newly acquired shares were worth roughly $21 million, though the value will move with Block’s market price.

Ark’s fund rules generally limit any one holding to 10% of an ETF’s assets. Block remained below that threshold in the Ark Next Generation Internet ETF, where it ranked as the fund’s 10th-largest position with a disclosed value of about $60 million, representing 3.51% of assets.

Block’s earnings provide the backdrop

Block’s second-quarter results offered a stronger operational picture than the stock’s Thursday decline might suggest. The company reported $6.62 billion in revenue, up 9% from the same period a year earlier, while adjusted earnings per share rose 65% year-over-year to $1.02.

Gross profit, a measure closely watched by analysts because it strips out costs associated with processing payments and bitcoin transactions, increased 25% to $3.17 billion during the quarter. That growth rate exceeded revenue growth, indicating that Block’s higher-margin businesses expanded faster than some of its lower-margin activities.

The company has also been reducing its cost base. Block cut roughly 40% of its workforce in February, a move that has shaped expectations for operating expenses and future profitability. Mizuho estimated that adjusted operating expenses could rise from $4.48 billion in the first half of the year to $4.56 billion in the second half, based on Block’s guidance.

That estimate suggests that spending discipline remains a major part of the company’s financial story. For a firm that has spent years balancing product expansion with profitability targets, Ark’s purchase follows results that showed both revenue growth and a material improvement in earnings.

Block’s relevance to cryptocurrency markets is concentrated largely in Cash App’s bitcoin features and its broader effort to link consumer finance with digital assets. Its merchant-focused Square business, meanwhile, gives the company a substantial foothold in conventional payments infrastructure. Ark’s decision to add shares after a one-day decline reflects a willingness to maintain exposure to both sides of that business model rather than treating Block solely as a bitcoin-related stock.

Ark also increased SpaceX exposure

Ark’s Thursday activity extended beyond public payments companies. The firm bought 20,318 shares of SpaceX across the Ark Innovation ETF, Ark Autonomous Technology & Robotics ETF, Ark Next Generation Internet ETF and Ark Space & Defense Innovation ETF.

Based on SpaceX’s reported Thursday closing price of $114.92, the purchase was valued at approximately $2.3 million. SpaceX shares rose 6.14% that day after falling 13.6% in the previous session.

The earlier decline followed attention to the company’s second-quarter results and $18.4 billion in quarterly capital expenditure, a figure described as six times higher than a year earlier. Capital expenditure covers large long-term outlays such as launch infrastructure, satellite deployment, manufacturing capacity and computing resources. Higher spending can support SpaceX’s satellite and launch ambitions, but it also raises the amount of capital the business must convert into future revenue.

Because SpaceX remains privately held, Ark’s reported share prices represent valuation marks used for fund holdings rather than a conventional public-market closing price. The addition nevertheless gives Ark’s ETFs increased exposure to a company with major interests in satellite internet through Starlink as well as launch services and spacecraft development.

Bullish position reduced

Alongside the purchases, Ark reduced its holding in Bullish. Through the Ark Next Generation Internet ETF, the firm sold 39,509 Bullish shares, valued at about $910,287 based on the disclosed transaction value.

The sale was much smaller than Ark’s Block purchase and does not by itself establish a change in the firm’s long-term view of Bullish. Daily ETF trading can reflect rebalancing, cash management and position-size limits as well as investment conviction. Yet the combination of trades shows Ark directing substantially more capital toward Block during the session than it removed from Bullish.

The transactions also illustrate how Ark is spreading exposure across several technology themes rather than making a single concentrated wager. Block connects digital payments, consumer financial software and bitcoin services; SpaceX brings satellite connectivity and aerospace technology; Bullish sits closer to cryptocurrency market infrastructure.

For Block, the fresh Ark buying arrives as the company faces pressure to show that stronger profit growth can persist while it continues to invest in Cash App, Square and bitcoin-related products. Its 3.51% weight in the Ark Next Generation Internet ETF leaves room for the position to grow, subject to Ark’s 10% holding limit and future movements in the fund’s assets and Block’s share price.