Smart Money Flow Type: Institutional Accumulation! Ark Space ETF unprecedentedly buys Tesla, is this an early move to lay the groundwork for Musk's empire merger with the "Golden Shovel"?

Market observers note that the space and defense innovation-focused exchange-traded fund under Cathie Wood completed a notable transaction on February 4th. The fund purchased 35,766 shares of Tesla for the first time, and by the next day, this position accounted for 1.99% of the fund’s total assets.

Although Wood’s Ark Invest has long held Tesla in its flagship innovation funds, including a significant position, this is the first time the automaker has been included in a space-themed investment portfolio. This asset allocation adjustment comes amid increasing market speculation about a potential major restructuring of Elon Musk’s business empire.

Recent reports indicate that SpaceX and xAI have completed a merger. Market analysis further suggests that Musk may seek to integrate this new combined entity with Tesla. Ark Invest’s rare purchase highlights the current difficulty for ordinary investors to directly participate in SpaceX investments and has sparked speculation about Musk’s possible early positioning for future capital operations.

There are two main interpretations regarding the motivation behind this build-up. The first suggests that Ark Invest may be accumulating shares to vote on potential mergers involving Tesla in the future. This is seen as a direct bet on Musk’s plan to consolidate his business empire.

The second interpretation is based on fundamentals. The space ETF has listed “adaptive robots” as a core investment theme. Tesla’s ongoing development of the Optimus robot, along with its vision to use robotics to help establish a “planetary civilization,” aligns closely with the broader narrative of space exploration. Therefore, even as a car company, Tesla’s robot potential provides logical support for its inclusion in this fund.

This purchase further cements Ark Invest’s position as a core holder of Musk’s companies. Among its other ETFs, Tesla remains the top holding. Specifically, in the Ark Innovation ETF, Ark Next Generation Internet ETF, and Ark Autonomous Technology & Robotics ETF, Tesla’s holdings are approximately 10.99%, 10.39%, and 9.93%, respectively.

Additionally, Ark Venture Fund, which invests in public and private companies, also holds shares of related firms. As of January 31, data shows SpaceX as the fund’s largest holding at 11.23%; xAI is the second-largest at 6.31%; and Tesla ranks thirtieth at 1.05%. These figures do not yet reflect any changes resulting from the SpaceX and xAI merger.

Wall Street’s focus on the potential for integration is increasing. Investor Chamath Palihapitiya has publicly stated his belief that Musk will ultimately complete a “reverse merger,” integrating SpaceX into Tesla, calling it a “reverse prediction” for 2026.

Wedbush analyst Dan Ives recently noted that the opportunity for Tesla to merge with the newly formed SpaceX/xAI entity is “growing.” He believes this expanding AI ecosystem will focus on both “space and Earth,” and Musk has both the motivation and logical basis to pursue such integration. Of course, any such merger would require shareholder approval and strict regulatory review.

Currently, SpaceX remains one of the world’s largest private companies, with extremely limited avenues for public investment. Aside from Ark Invest’s funds, investors mainly gain indirect exposure through holdings in publicly traded companies like Bank of America, Alphabet, and EchoStar.

Regarding the prospect of SpaceX going public, Musk has hinted at an IPO plan but has not yet filed official documents. Market speculation suggests a potential IPO could occur as early as June 2026. Against this backdrop, Ark Invest’s direct purchase of Tesla through the space ETF, whether driven by optimism about robotics or expectations of future mergers, provides a new signal for investors seeking related asset exposure.

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