Cathie Wood's flagship fund has been selling Nintendo stock ahead of the October 8 introduction of the Japanese video game maker's Switch system.
In July, the firm tweeted that it would offer the OLED Switch update this month but had "no plans to launch any other model," the renowned stock picker began to sell her Nintendo stock.
According to data on Ark's website, the Ark Innovation ETF now owns a small investment in Nintendo valued at roughly $82,000, consisting of 1,500 American Depositary Receipts.
That's down from more than 4.7 million shares held by ARKK at the end of February when Nintendo's US-listed ADRs were at their highest point this year. The stock has lost 32% year to date, and it was the last trading at $54.60 per share.
The new Nintendo device, which costs $350, features a larger 7-inch OLED screen. However, a much-anticipated improvement to the console's visuals – 4K display capabilities on par with Microsoft and Sony – is lacking. Some fans have been disappointed by this.
Also, analysts aren't very optimistic about the company, with Wedbush predicting that the next set of suitable catalysts for Nintendo after the Switch will be challenging to come by.
In a recent report, Wedbush analysts Michael Pachter, Nick McKay, and Junaid Zubair said, "The Switch is likely approaching its post-peak years as competition picks up, and Nintendo has highlighted worries. About supply shortages."
"The scale of the Switch OLED model rollout remains uncertain, and Nintendo has indicated that it does not have any plans to launch further Switch models beyond the OLED model at this time," they wrote, implying that a device with 4K resolution is unlikely to be released anytime soon.
Wood has been selling Tesla stock as part of his "disruptive innovation" investment strategy. Late last month, three of Ark Investment Management's ETFs sold $270 million worth of the electric vehicle maker's stock. However, Tesla is one of their top holdings for all three.