Cathie Wood and her ARK Invest firm changed up their defense holdings on Wednesday after the U.S. earlier this week reinterpreted an arms control pact to ease military exports of drones. ARKK shares broke out on Thursday.
Secretary of State Marco Rubio approved a reinterpretation of arms exports control policies that will allow for the easier sale of "Reaper"-style and other advanced military drones, according to Monday reports. Under the updated policy, unmanned aerial vehicles will now be treated as fighter jets, rather than missile systems. The reclassification allows the U.S. to sidestep the Missile Technology Control Regime, which 35 nations signed in 1987, and sell drones to the likes of the UAE and Eastern European countries.
The change unlocks the sale of more than 100 MQ-9 drones to Saudi Arabia, which were requested earlier in the spring and could be part of a $142 billion deal, Reuters reported Monday.
General Atomics is the prime contractor for the MQ-9, while Honeywell supplies the engine, according to the Air Force.
The new policy also allows large drone manufacturers like General Atomics, Kratos and Anduril to treat their products as "foreign military sales" by the State Department, which allows for easier international sales, according to Reuters.
Cathie Wood, ARK Shift Defense Holdings
Cathie Wood and her ARK Invest firm on Wednesday purchased 10,508 shares of AeroVironment across the ARK Autonomous Technology & Robotics ETF and the ARK Space Exploration & Innovation ETF.
The purchases were worth about $2.86 million based on AVAV's Wednesday closing price of 272.07. AeroVironment manufacturers various tactical military drones as well as missile systems such as the Switchblade.
AVAV stock swung 4.2% higher Thursday, approaching a 295.20 buy point in a 12-week base pattern. Trading 15% higher for the week, shares are extended from an early entry near 257 that the stock cleared on Tuesday.
Wood also added a total of 9,209 shares of L3Harris to ARKQ and ARKX, worth $2.59 million based on Wednesday's 281.86 closing price. L3Harris provides subcomponents, sensors, motors and more for missiles, launch vehicles, and jets like the F-35.
LHX stock climbed a fraction on Thursday. It remains in a buy range above a flat base buy point at 280.52.
ARK sold 131,177 Kratos shares across the two funds, worth roughly $9.94 million based on the 75.74 closing price Wednesday.
KTOS stock jumped 6.5% Thursday. Shares are extended after a break above a down sloping trendline on Sept. 11.
Shares of the ARK Innovation ETF surged 3% Thursday to close just above a buy zone for a flat base. Shares broke out above the 79.19 buy point on Monday.
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