Trading in the new space exploration ETF from Ark Invest began on Tuesday, as Cathie Wood’s firm looks to tap the growing space industry.
“Space is already an invisible backbone to our economy and we think that’s only going to become more so as [satellite] constellations launch,” Ark Invest analyst Sam Korus told CNBC’s Morgan Brennan on “Power Lunch.”
Shares of ARKX slipped about 1% in its first day of trading, with the stock closing at $20.30 a share.
“We’ve all seen the memes going around on Twitter,” Korus said, acknowledging public skepticism of ARKX’s holdings.
“The fact that people are dismissing this out of hand is very reassuring to us, and kind of demonstrates the type of research that we’re doing and how we can be unique,” he added.
Korus gave the example of Netflix, which has a 1.25% weighting in ARKX.
“Netflix … has 200 million paying subscribers. In the U.S. alone, there’s over 40 million people who don’t have access to broadband and so, if a satellite solution can bring access to those customers and expand the addressable market and the topline for Netflix, then this is something that is very important,” Korus said.
While none of the seven SPACs that recently announced mergers with space companies are in ARKX, Korus noted that Ark is “constantly evaluating these companies.”
“I think with SPACs it’s important to remember that a lot these are almost at the pre-IPO stage,” Korus said. “We really want to be sure that we’re picking the winners long term, particularly in aerospace – where many companies do go bust and things get delayed.”