Cathie Wood added her voice to one of Wall Street’s favorite parlor games: What will Elon Musk do next with his new stake in Twitter Inc.
The Ark Innovation Inc. founder said the “global town square” may need to rethink its revenue stream, in an interview with CNBC shortly before her appearance at the Exchange ETF conference in Miami Beach.
“Maybe the model isn’t right around advertising, maybe it is subscription,” Wood said, according to a transcript. “I don’t know what is exactly in his mind, but the one thing for sure is in his mind is it should not include censorship. And I think he feels very strongly about that.”
Wood was asked why she sold 185,900 shares of Twitter from her Ark Next Generation Internet ETF (ticker ARKW) on April 11 following Musk’s April 4 filing that he had taken a 9.2% state in the social media platform. Even after the sale, Twitter makes up 1.8% of ARKW.
“We had been cutting back on Twitter after Jack Dorsey handed over the reins,” she said of Twitter’s co-founder who stepped down as chief executive officer in November. “We know that there is now going to be a lot of management distraction, maybe board distraction, with or without Elon.”
“I think there’s going to be some drama,” she continued. “And we don’t know if the advertising model, the subscription model, some combination of that is going to prevail.”
Twitter shares fell 5.4% on Tuesday in New York.
-With assistance from Elaine Chen.
This article was provided by Bloomberg News.