00:00I want to focus in on two of your funds, the ARK Innovation ETF and ARK-F, because there's been some really interesting trading over the past month or so, specifically around IPOs.
00:11I look at ARK-K, for example, ahead of the Klarna IPO, you saw your fund AUM balloon by $3.5 billion, a real surge in share creations, which were then redeemed in the days that followed.
00:23It's been theorized that this is basically a way for whoever's behind the trade to get exposure to shares of the IPO in a sort of roundabout way.
00:32And I know you've addressed this before, but does ARK know who is behind these huge trades?
00:40No, we don't.
00:41But we do think, as you say, Katie, that they are solely, that the surges are solely to get into whatever the IPO is.
00:54Now, what happened is Circle, we were a cornerstone investor, $150 million, and you saw what happened to that stock.
01:04ARK saw no such activity around that particular IPO.
01:10However, it seemed to give, I'm going to say, market makers and others the idea that, wait a minute, if ARK can get a big allocation to these IPOs,
01:22maybe we can benefit by anticipating which ones they will get and choose to participate in.
01:29So, they've been doing that, we're seeing that, but it does take a bit of guesswork, and we don't participate in every IPO.
01:39So, I don't think, I think that they'll probably be a little more judicious in doing this going forward,
01:48because I think some of this trading has caught them out flat-footed.
01:52Yeah, yeah, that's a good point there, that it does take some guesswork.
01:56You want to be right when you're moving this amount of money, but help me when it comes to the structure of this and how much, say, ARK has.
02:04When you see a big trade like this coming through, is ARK in a position where it can reject the trade from the authorized participant?
02:14No, we can't.
02:15We just, you know, one of the most wonderful things about ETFs as a portfolio manager is I don't have to worry about flows.
02:24With mutual funds, the portfolio manager has to worry about flows.
02:28But the market around us facilitating ETFs, market makers, authorized participants, it's fantastic.
02:38They handle all of the flows.
02:40I see.
02:40They're using all kinds of instruments, and we don't have to worry about it.
02:44So, you know, I don't bother about it.
02:47But does it bother you in general?
02:49Is it a problem for you that certain investors might be undertaking this strategy?
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