Shares of Unity Software traded down more than 17% last Wednesday.
The decrease followed the San Francisco-based video game software developer announcing a $4.4 billion all-stock merger agreement with mobile app advertising and monetization platform, ironSource, ARK Invest wrote in a recent insight.
By midday Monday, the stock began its rebound and is up over 7%. The stock is still down over 13% over five days.
“In our view, the merger is a net positive as it integrates a more mature, scaled mediation platform that should improve the developer experience with UnityAds,” ARK Invest wrote.
ARK continued, “given ironSource’s record of positive net income since 2019, we also believe the acquisition will accelerate Unity’s path to profitability. Unity Software provides solutions for the creation of real-time 2D and 3D content across the entire creation-to-monetization pipeline.”
Unity Software is a top 20 holding in both the ARK Innovation ETF (ARKK) and ARK Next Generation Internet ETF (ARKW), in which the company is weighted 3.14% and 2.73%, respectively, according to VettaFi.
ARKK invests in companies that are poised to profit from “disruptive innovation” like artificial intelligence, DNA technologies, energy innovation, automation, financial technology, and the increased use of cloud computing.
The top five holdings in ARKK as of July 18 include Zoom Video Communications-A (ZM, 8.48%), Tesla Inc (TSLA, 8.42%), Roku Inc (ROKU, 7.77%), CRISPR Therapeutics AG (CRSP, 5.94%), Teladoc Health Inc (TDOG, 5.15%), according to the fund’s website.
ARKW invests in companies that are poised to profit from advances in cloud computing, e-commerce, big data, artificial intelligence, mobile technology, social platforms, and financial technology, according to VettaFi.
Top holdings in ARKW as of July 18 include Roku Inc (ROKU, 8.64%), Zoom Video Communications-A (ZM, 8.02%), Tesla Inc (TSLA, 8.02%), Block Inc (SQ, 6.25%), and the Grayscale Bitcoin Trust BTC (GBTC, 5.96%), according to the fund’s website.
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