Quick Take

Cathie Wood’s Ark Invest purchased $30.5 million worth of Circle Internet Group shares across three of its exchange-traded funds on Wednesday, as the stock fell sharply despite the company reporting strong quarterly growth.

The ARK Innovation ETF (ARKK) bought 245,830 shares of Circle on Wednesday, while the ARK Next Generation Internet ETF (ARKW) added 70,613 Circle shares to its portfolio. The ARK Fintech innovation ETF (ARKF) also purchased 36,885 Circle shares.

Ark's move to buy more shares of Circle, the issuer of USDC stablecoin, came after Circle's stock plunged 12.2% on Wednesday to close at $86.3, according to The Block's price page.

Circle reported strong third-quarter results on Wednesday. It booked $740 million in total revenue, up 66% year-on-year, while its net income surged 202% to $214 million. The USDC circulation reached $73.7 billion at the end of the quarter, up 108% from a year earlier.

In an equity research report released Wednesday, analysts at investment bank William Blair said they encourage investors to build Circle positions on weakness with the stock down 12%. The analysts gave an "outperform" rating for the stock.

"We see Circle as a clear leader in a winner-take-most market as it builds out critical network infrastructure Circle Payments Network and Arc," the analysts said.

The William Blair analysts also outlined key risks, including regulatory uncertainty, industry fragmentation, intensifying competition, inadequate stablecoin infrastructure, corporate inertia, and potential pressure from lower interest rates.

Also on Wednesday, Circle said that it is "exploring the possibility" of a native token for its Arc blockchain as part of its push to expand onchain programmable finance. Last month, it launched the Arc public testnet for its Layer 1 stablecoin-centric chain.