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Not All NGS Tests Are Created Equal

Follow Simon on Twitter @sbarnettARK


ARK believes that the cost of next generation DNA sequencing (“NGS”) is declining in line with Wright’s Law: for every cumulative doubling in units produced, costs will decline at a fairly consistent rate. Given the explosion in genetic data, the cost declines associated with DNA sequencing have been breath-taking.


The amount of data generated by NGS tests varies significantly, with liquid biopsies testing for cancer recurrence dwarfing ancestry tests, as shown below. Stay tuned for a blog this week with a deeper analysis of the sequencing intensity of various NGS applications.

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Facebook Aims to Launch Its Own Cryptocurrency This Year

Follow James on Twitter @jwangARK


During the next four months, Facebook hopes to launch its own cryptocurrency.  With a team of 50 people, former PayPal executive David Marcus is designing the coin to facilitate payments in WhatsApp, Facebook’s messaging service with more than 1.5 billion users. Facebook plans to peg the coin’s value to a basket of currencies to minimize day to day volatility. Not clear, however, is whether the coin will be decentralized or controlled by Facebook.


At our brainstorm this week, ARK debated why Facebook believes that it needs to launch its own cryptocurrency. Based on successful precedents like Tencent’s WeChat Pay and PayPal’s Venmo, popular payments products don’t need new currencies.


We discussed three possible explanations. Facebook could be building a cryptocurrency for the masses that is easy to use and stable in value. It also could be targeting the $600 billion remittance market, as existing mobile payment platforms are country-specific and cannot facilitate cross border transactions. Perhaps the simplest explanation, however, is that Facebook wants to capture more data: with more transactions on its network, it will be able to identify spending habits more precisely and improve ad targeting in all of its apps.


Our working assumption is that Facebook is acting in a rational and clear-headed manner. Historically, however, companies have fallen victim to organizational imperatives rather than unmet market needs. Microsoft entered the search business, Google launched a social network, and Verizon got into mobile advertising, all three making big investments based on internal narratives without a corresponding market need. Facebook’s own cryptocurrency could be at risk of joining this less than illustrious list.


Tesla Completes Master Plan Part One

Follow Sam on Twitter @skorusARK


In 2006, Tesla laid out a simple plan:

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On Thursday, Tesla completed these goals by announcing a $35,000 base priced Model 3 with a 220-mile range that can accelerate from 0 to 60 mph in 5.6 seconds. To lower costs, Tesla is shifting all sales online and closing a number of its galleries. Musk also recommitted to making service a top priority to ensure that the mass market Model 3 comes with the best user experience possible.


While the $35,000 Model 3 captured headlines, Tesla made several other important announcements, among them:

Now that Master Plan Part One is complete, Tesla can focus on Master Plan Part Deux, which includes self-driving and other kinds of vehicles.



Lyft’s S-1 Suggests Autonomous Driving Is Not the Priority that It Should Be

Follow Tasha on Twitter @TashaARK


Lyft filed its S-1 this week with plans to IPO at a $20–25 billion valuation, up 33-66% from its last round at $15 billion. As autonomous vehicles commercialize, ride hailing companies will need a strategy to stay in business.


We looked through Lyft’s S-1 for mentions of autonomous driving. Notably, in its list of nine reasons “Why Lyft Wins”, autonomous is its lowest priority. Perhaps it is not confident enough in its autonomous technology strategy or in the time it will take to play out. Given the stakes, ARK sees this gap as a large oversight.


Thus far, no ride hailing company seems to be pursuing a fully autonomous technology stack, suggesting that most will partner with other autonomous-focused firms.  Problematically, most of the autonomous platform fee – the cut of gross revenue that Uber and Lyft currently take today – should go to the autonomous technology provider, leaving players like Lyft with a fraction of the fee for lead generation. Autonomous vehicles may put ride sharing companies at risk of failure.

ARK's statements are not an endorsement of any company or a recommendation to buy, sell or hold any security. For a list of all purchases and sales made by ARK for client accounts during the past year that could be considered by the SEC as recommendations, click here. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of the securities in this list. For full disclosures, click here.



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