Key Takeaways:
- Cathie Wood of Ark Invest sells $4.8 million worth of Block shares.
- Block remains the 13th largest corporate holder of Bitcoin across the globe.
- Analysts expect a 32% decline in EPS and a 2.27% rise in revenue ahead of Block’s Q2 earnings.
Anticipation is building around the Jack Dorsey-led company the Block Inc. (XYZ), as it is due to release its Q2 earnings on Thursday, August 8th. Dorsey was also the former co-founder and CEO of X (Twitter). Block was recently included in the S&P 500 following an impressive rally, rising over 30% in a year. However, prominent tech investor Cathie Wood, founder of ARK Invest, has sent a potentially cautious signal in response to this positive trend. She has reduced her holding of Block, selling a large number of shares just two days before the Q2 earnings announcement. Investors have questioned if the move is simply profit-taking or a hint of anxiety relating to the Q2 earnings report.
ARK Invest sold 63,504 shares of Block worth $4.8 million on Tuesday through its flagship ARK Innovation ETF (ARKK). This is consistent with recent selling by ARK Invest, as they sold $1.5 million worth of stock at the end of July, indicating an intentional reduction in exposure.
The timing of the potential sale, with Q2 earnings already underway and new product announcements, comes at a time when investors and traders should exercise caution. Block launched a Bluetooth-based, decentralized messaging application, Bitchat, which recently broke into the top 200 of Apple’s Business App Store charts. Block also has its own strategic Bitcoin (BTC) reserve, with 10% of all BTC-related gross profits going towards the purchase of BTC. Block is right now the 13th largest corporate holder of BTC globally, holding over 8,000 BTC.
The decision to offload Block shares could be viewed as a potential move to reduce risk ahead of the Q2 report. Analysts forecast that Block will report earnings per share (EPS) of 0.68, a decline of 32% year-over-year (YoY) and revenue of $6.3 billion, rising by 2.27% YoY. When one of Wall Street’s most prominent tech investors makes a move, such an action sends a sense of caution amongst investors and traders. With traders and investors eyeing August 8th as a crucial date to determine Block’s financial performance.
