Cathie Wood Interview: Twitter, Tesla, and Disruptive Innovation

Cathie Wood, CEO of ARK Investment Management, joined host Melissa Francis, former CNBC, MSNBC, Fox Business, and FOX News anchor, to discuss her views on Tesla, Twitter, and more…

Melissa Francis: Welcome everyone today. We’re here to talk about Magnifi by TIFIN, a marketplace where you can harness real time proprietary data to help individual investors and financial advisors find, compare and buy investment products like stocks and ETFs mutual and model portfolios to grow and preserve your wealth. I’m Melissa Francis. I know just a little bit about this subject matter. I’m a former CNBC MSNBC Fox business and Fox news anchor. And you will remember if you’ve watched us before we talked about the best crypto investment strategies with Anthony Scaramucci, the best bond with the bond king himself, Jeffrey Gundlach and the best private equity strategies with Marty Nesbitt. Now we have a very special guest that I am super excited about to talk about stocks, um, and everything hot out there, Kathy wood. She’s the CEO of arc. She is a board member of TIFIN, which is Magnifi’s parent company.

Melissa Francis: Cathie, thank you so much for being here. I wanna drill down on your latest blog because there were so many good nuggets in there, and I found some of them kind of counterintuitive. So I wanna get into those, but first, if I could take you to the hot story of the day, which of course is Twitter. And I wanted to ask you, um, looking at where things stand today, and I know as fast moving, it keeps changing, but, um, if you were Elon Musk, what would your next move be? What would you do from here?

Cathie Wood: Well, he’s got a $54, I guess it’s $54 and 20 cent offer out there. So I think he’ll buy it his time. It will be interesting to see if other bidders, uh, show up. Uh I’m uh, I’m hearing that there are some, so, so let’s see. Not, not quite sure it’s still quite fluid, right?

Melissa Francis: Yeah, no. And he says that if this doesn’t work, he has plan B. What do you think that is?

Cathie Wood: Goodness, I don’t know if it would be something a little more hostile. Just I have no idea, you know, uh, Elon Musk is, is, has his own mind and, and, and is, uh, and I’m sure thinking very creatively about this,

Melissa Francis: If he does succeed and you, or him again, what would you do with the company? What do you think that they need to correct?

Cathie Wood: Well, one of the things that, uh, I think has hampered Twitter is its advertising model and this is what scares, uh, uh, analysts out there. Oh my gosh. You know, uh, he’s going to upend the advertising model, uh, because advertisers don’t like to be, uh, to have their ad shown next to questionable content, which is something different for everyone, right? Uh, and so this idea of perhaps a subscription service is a possibility or a tipping service, uh, but certainly open sourcing. The algorithm will be the first thing he’ll do, uh, so that, uh, there’s transparency associated with what is and is not censored.

Melissa Francis: So do you think that’s a good or a bad thing for the company? I mean, it might be a good thing for freedom of speech or however, may you, you may look at it politically, but if you were a shareholder, is it a good idea for him to get that out there? So everybody knows how the algorithm really works?

Watch the full interview with Cathie Wood HERE

Cathie Wood: Well, I think even Jack Dorsey thought that Twitter was beginning to tie itself in knots over the censorship. And, so he was trying to figure out what can we do to overcome this monster really? And, uh, so I think they do need to do something. Um, uh, many people would describe what’s happened to Twitter as, uh, becoming a cesspool. Now we don’t think that we use Twitter. Uh, it’s, it’s become quite important to our business as have other social media, uh, platforms. Uh, and so we know that we can unfollow someone, uh, that is hampering our research or our ability to engage with others in a civil way. Um, but I, I think that, um, I think that even Jack was saying, okay, we need a change. We have to change what we’re doing. And I think he and Elon probably are aligned, uh, and this idea of an open source algorithm, a shift away from the advertising model towards something, uh, more or subscription based and, you know, more transparency. I mean, uh, ARKK is radically transparent. Everything we do, uh, is transparent and it has done nothing but help our business. Sure. You’ve got, uh, people out there who are, um, denigrating our work. Uh, but we know those people as, as we drill into what they’re saying, they’re not doing any research. We’re really interested in engaging with people who are doing real research. Uh, and I think transparency, uh, would make that make, uh, our experience with Twitter even better.

Melissa Francis: Yeah. The fact that you’re not afraid to engage like that and to, you know, hear from those who might oppose you shows how confident you are about what you’re doing. You have to wonder about a company that wants to hide what they’re doing. Let me ask you though, on, on the Twitter front, um, so what do you think the company’s worth? I mean, I know I wanna talk to you about your Tesla target, but as you look at what Elon’s willing to pay, um, what do you think if you had to put a price target on the stock two years down, or four years down the road, what would you say?

Cathie Wood: Well, I think there’s so much uncertainty right now that I couldn’t give you one. Based on their existing model, our compound annual rate of return expectation, uh, for Twitter is, uh, roughly 25%. Now, their model’s going to change. There are going to be a lot of dislocations. We have a lot of very short term oriented shareholders who are probably now have moved into Twitter to make a fast buck, 54, uh, 20, $54 and 20 cents. Uh, but the model’s going to change. And so we will revisit once we understand what’s going on, we will revisit…

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