Cathie Wood’s ARK Investment Management wrote down its stake in Twitter by 47%, the Wall Street Journal reported on Monday. While the reduction represents a notable change, Wood said it does not reflect her outlook on the long-term viability and success of the platform, which remains bullish.

Twitter Struggling With High Debt and Declining Ad Revenue

ARK Invest, the investment management firm led by Cathie Wood, slashed its stake in Twitter by 47% since the social media platform was acquired by Elon Musk. ARK holds a small stake in Twitter through its venture fund, which makes both public-market and private investments.

“We take fair valuation very seriously and absolutely have had to write that [Twitter] down. The write-down is not representative of our fundamental outlook and belief in the long-term return on investment we believe that it will have for our shareholders.”

– Wood said.

The move comes due to Twitter’s troubled financials, including a substantial debt load and a sharp decline in advertising following Musk’s $44 billion takeover. According to Tesla’s boss, Twitter lost around 50% of advertising revenue and has negative cash flow.

Meta’s Launch of Threads is Good for Twitter, Wood Says

However, although writing down its stake in Twitter suggests ARK is aware of the company’s woes, Wood said she remains bullish on Musk’s social media platform in the long term. For that reason, the stake reduction should not come as a surprise, given that her funds constantly update internal valuations of private companies, she added.

“I would love to get more stock at these price levels actually, but no one wants to let any go. So that tells you something.”

The latest change comes shortly after Meta Platforms launched Threads, a microblogging app seen as a competitor to Twitter. Meta was accused of potentially Twitter’s stealing intellectual property with the launch of Threads, though Mark Zuckerberg’s tech giant fiercely denied the allegations. Since its launch, Threads witnessed over 100 million sign-ups.

Meanwhile, Wood believes that the rollout of Threads could be good for Twitter as it will likely ramp up competition.

“We think they can coexist. I think Threads has lit the competitive fire or taken it up a notch and it will be good for Twitter. We also think that longer term, Elon and team are very serious that they’re going to turn this into an everything app.”

– Wood said.

Musk has said the buyout of Twitter is a part of his broader plan to build “an everything app” that could combine information and entertainment. If it succeeds, it could grow to more than a billion users in five to 10 years, the billionaire believes.

This article originally appeared on The Tokenist

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