Million Dollar Bet
Cathie Wood bets on crash stocks
08/23/2023 12:51 p.m
The latest quarterly figures from the payment processor Adyen caused a course debacle. Analysts lower their thumbs – but a cult investor buys heavily.
Celebrity investor Cathie Wood has increased her bet on Dutch payments processor Adyen after shares plummeted. The price fell by almost half after the company presented quarterly figures last week.
According to financial news agency Bloomberg, two funds managed by Woods bought Adyen shares worth around $9 million at the closing price on Monday. This means that Woods funds currently hold Adyen shares with a total value of 37 million dollars.
Both funds are up about 40 percent this year. The Nasdaq 100, the world’s most important tech index, rose a little less. The strategy of Wood and her mutual funds is to hold positions for long and add to them on dips. Wood has long been hailed as the queen of Wall Street. But after the end of the pandemic, tech stocks plummeted – and their funds plummeted too.
It remains to be seen whether the bet on Adyen will work out. Adyen processes payments for companies such as Easyjet, Zalando, HelloFresh, Netflix and Spotify. In the US in particular, competition from Stripe, Fiserv and PayPal is growing.
“Shocking Drop”
In the second quarter, operating profit fell by ten percent to 320 million euros. From April to June, sales grew by a whopping 21 percent to EUR 739 million, but fell short of the Management Board’s medium-term growth expectations. He justified the downward trend in day-to-day business primarily with higher wage costs and the increase in the workforce.
“Adyen clearly missed expectations with a shocking slowdown in growth momentum,” said DZ Bank analyst Timo Dums. “The key question is whether the company can quickly return to the medium-term growth trend,” said JPMorgan.