We share weekly commentaries with investors on stocks in our strategies that have appreciated or dropped more than 15% in a day during the course of the week. We hope you find this commentary useful.
Silvergate (SI)
+21.5%
Shares of Silvergate (SI) traded up 21.5% on Monday after Morgan Stanley published a report describing the increasing correlation between Silvergate's (SI) stock and the price of bitcoin as institutional investors increase their allocations to cryptoassets. Founded as a traditional commercial bank in the late eighties, Silvergate today is focused primarily on services that enable institutions to access exposure to cryptocurrencies.
Shares of Vuzix (VUZI) traded up 32.3% on Monday after Facebook rebranded to Meta, highlighting its commitment to the AR/VR space. Vuzix offers AR display and computing glasses for consumer and enterprise markets around the world.
Shares of Zillow (ZG) fell 25% on Wednesday after the company announced not only a significant miss relative to third quarter earnings expectations but also plans to shut down Zillow Offers, citing difficulties in forecasting home prices in volatile markets. In response, it is reducing its workforce by roughly 25%. In ARK's view, this news is the result of execution issues associated with Zillow's AI pricing algorithms despite its access to ample data, calling into question the high balance sheet risk necessary to enable the scaling of iBuying business models.
Cerus Corp. (CERS), known for INTERCEPT, its blood and plasma products in the transfusion space, traded up 16.6% on Wednesday after reporting much higher than expected 53% revenue growth for the third quarter. Cerus continues to gain market share and is becoming the standard of care globally in the blood and plasma space.
Arcturus Therapeutics (ARCT), a pharmaceutical company developing mRNA vaccines to prevent COVID-19, traded down more than 16% on Friday after Pfizer indicated that its antiviral pill, Paxlovid, reduced the likelihood of COVID-19-related hospitalizations and death by 89%.
Codexis (CDXS), a protein engineering company closed up 14.9% Friday after posting third quarter earnings significantly higher than expected. More important, the enzymes Codexis manufactures have been critical to the success of Pfizer’s highly effective COVID-19 antiviral.
Shares of Peloton (PTON) traded down 35.4% today after the company missed Wall Street estimates for both revenue and earnings. Facing tough comparisons against its pandemic-related boom last year, Peloton cited supply chain costs and a reopening of the global economy for the disappointment relative to its own expectations. Despite these near-term headwinds, we believe that Peloton has disrupted the legacy health and fitness industry and, in the long run, will continue to cause mass migration to connected fitness at home. Peloton offers connected fitness products such as bikes and treadmills with subscriptions to live and on-demand fitness classes.
