Baillie Gifford Cuts its Tesla Stake by Half

Baillie Gifford, the Scottish investment manager has sold half of its take in electric car market Tesla(TSLA), according to an article at CityWire, UK. BG was the largest institutional investor in Tesla with holdings of about 40 million shares or about 8% of the company at one time last year. It is not surprising that BG has decided to lock in the gains since they started buying shares when they were $6 many years ago. Since then the stock has sky-rocketed with a 695% return in 2020. This year the stock has increased from under $730 in January to close at $816 on Friday.

On Feb 8th, Tesla announced as investment of $1.5 billion in bitcoin. Some market participants have wondered if this is a wise strategy for the firm. In addition, last week Musk’s brother Kimbal Musk sold $25 million worth of Tesla shares. Now with BG paring down their investment some investors may be wondering if the top is already in for the electric car marker’s stock.

From the article at CityWire, UK:

Baillie Gifford has slashed the size of its holding in Tesla, the Elon Musk-led electric vehicle company which was its highest conviction bet and biggest driver of returns last year.

The Edinburgh-based asset manager has halved the weighting in both Scottish Mortgage (SMT), the UK’s largest investment trust, and Baillie Gifford US Growth (USA), the best-performing trust last year.

The trusts’ positions in Tesla grew significantly after its nine-fold share price leap in 2020, and after taking some profits, USA’s exposure has fallen to 4.4% from 8.7%.

Other Baillie Gifford funds have yet to report their latest portfolio weightings, but seem likely to have followed suit. Having been Tesla’s largest external investor a year ago with a 7.7% stake, Edinburgh-based Baillie Gifford cut its exposure to 2.8% at the end of December, ranking it Tesla’s fifth biggest shareholder, including Musk who owns 18%, according to Refinitiv data. This was down from Baillie Gifford’s 4.4% position in September.

According to Scottish Mortgage’s latest factsheet, first reported by Fund Hunter on Twitter, Tesla was a 5.1% position, the fourth biggest in the global portfolio at the end of January. This was cut from 8.9% at the turn of the year when it was still its top holding by a significant margin.