Meanwhile, short interest in the fund’s shares showed a massive spike, with 100 per cent of the shares available for shorting currently out on loan, FIS Astec Analytics data showed.
Short sellers typically borrow and sell shares they expect to fall in value, hoping to buy them back at a lower price to pay back the loan and pocket the difference.
David Lewis of FIS Astec Analytics said his firm’s data on borrowing costs suggests potential buying of the ETF as the price falls.
According to Ark Invest’s website, the Tesla share purchases were carried out in three instalments worth about $US124 million, $US39 million and $US8 million. On the same day Ark Invest’s funds also sold $US126 million of Taiwan Semiconductor’s US-listed shares.
Ark Invest now holds a more than 0.5 per cent stake in Tesla for a weighting of 6.6 per cent across all its funds.
The ARK Innovation fund has large positions in so-called momentum stocks, which tend to attract investors based on thematic trends rather than fundamentals or valuation.