Cathie Wood's Ark Invest suffered another setback after shares in one of its biggest holdings, Teladoc Health Inc, lost nearly half their value on Thursday following a dismal forecast.
ARK Invest is Teladoc's largest shareholder, with 19.5 million shares worth about $1.1 billion. The holding is also ARK Innovation ETF's third biggest after Tesla Inc and Zoom Video Communications Inc, with a weightage of 6.8%.
The flagship fund, one of the biggest pandemic winners due to its focus on hyper-growth stocks, has come under intense pressure, losing nearly half its value this year, as threats of aggressive interest rate hikes fuel a selloff in the red-hot technology sector.
The top 10 holdings of the fund, including Roku Inc and Coinbase, are down in the range of 50% to 76% in the past 12 months, with the exception of Tesla, which has risen 25% over the past year.
"Aggressive growth managers that benefited by holding pandemic winners over the last two years may struggle in the current environment, and ARK is no exception," said Jason Benowitz, senior portfolio manager at the Roosevelt Investment Group in New York.
Higher advertising spending at Teladoc's mental health segment and longer sales cycle for chronic care segment weighed on the largest U.S. telehealth company's first-quarter results.
Teladoc, which owns online therapy service BetterHelp, lowered its full-year adjusted EBITDA forecast to between $240 million and $265 million from between $330 million and $355 million.
It also cut its revenue forecast to a range of $2.40 billion to $2.50 billion from a range of $2.55 billion to $2.65 billion.
Teladoc shares slumped 47% to a more than four-year low at $29.98. It would be the stock's sharpest one-day plunge, if losses hold.
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