Tesla did not expect its share price to climb as expected after the stock split. In a long-term mood, Baillie Gifford, Tesla’s largest outside shareholder, has instead achieved high-precision cashing by significantly reducing its stake. The Securities Daily understands that The sale of Leigh Gifford took place at the end of August, when the group reported the sell-off on August 31 and disclosed it on September 2, as required by the Securities and Exchange Commission.
The group’s stake in Tesla fell from 6.32 percent to 4.25 percent, involving 1,928.4 million shares, according to a filing with the Securities and Exchange Commission. Based on Tesla’s August 31 closing price of $498.32 per share, the total cash-out amount is $9.61 billion. The Edinburgh-based fund group currently manages 262 billion pounds ($2386 billion) in assets, with more than 200 of its clients holding Tesla shares, the company said.
Tesla’s shares fell 14.7 per cent in early trading on September 2nd, before recovering to close down 5.83 per cent.
In response, Leigh Giffords said in a statement that it was inappropriate to interpret the sell-off as a loss of confidence in Tesla by institutional investors, and that the group still had long believed in Elon Musk’s company and that the decline in its stake was due only to portfolio constraints.
James Anderson, a group partner, told the media: “The sharp rise in Tesla’s share price means that we need to reduce our holdings to reflect the centralization guiding principle of ensuring that a single stock is not weighted more than a certain proportion of the client’s portfolio.” There are no difficulties with Tesla’s external financing, but if the share price falls sharply, we will still choose to increase our stake. “
“At a critical time for Tesla, we were fortunate to be its largest external shareholder,” Anderson said. We are very grateful and respectful of Tesla’s extraordinary efforts and achievements in driving the transportation and energy revolution in an environment of questionable and negative public opinion. “
Reporters noted that Leigh Gifford first bought 2.3 million shares of Tesla in January 2013, worth $89 million, when Tesla’s share price (adjusted for stock split) was less than $7 (about 48 yuan). It increased its stake to nearly 14m shares in December 2019, or 7.7 per cent, making it the second largest shareholder after Musk at the time.
So far this year, Leigh Gifford has sold nearly half of Tesla’s shares, according to Reporters Watch. By the time the sell-off is complete, the group’s customers are expected to make as much as $20 billion ($136.7 billion) in profits from investing in Tesla.
In this regard, Sina automotive finance columnist Lin Zhi told the Securities Daily reporter, Tesla’s share price before the share price surge mainly stems from three aspects. First, the stock split itself was a big gainer for the company, followed by Tesla’s fourth consecutive quarter of earnings, which was included in the Standard and Poor’s 500 index, and finally, Tesla’s second-quarter car deliveries continued to rise better than expected.
“Investors familiar with Tesla should be no stranger to Tesla’s ups and downs, with its share price up 465 percent so far this year alone. The controversy over its share price and market capitalisation has never stopped. Lin told reporters that behind Tesla’s soaring market capitalisation is not just Musk’s “tech maniac” idol aura. Tesla has not slackened in its efforts to keep opening up new ground.
On September 2nd Tesla said it planned to raise up to $5bn ($34.2bn) through a new offering to invest in its Cyberruck electric pickup and fund its international expansion, including plans to build a European manufacturing and battery centre in Germany.
Moreover, Musk appears to be opening up new battlegrounds in Europe in order to dominate the European electric car market. Tesla has now been awarded a licence to supply electricity across Western Europe, according to the latest news. Tesla has previously asked German consumers several times whether it would accept Tesla’s power supply to their cars.
Some auto industry analysts, who did not want to be named, said Germany was Europe’s largest electricity market and the most important car market. Tesla is likely to challenge traditional local power utilities by setting up electric utilities in Germany through a series of moves and working with one-two agencies.
(Tesla was sold off by outside major shareholders after the split, and Giffords made a cumulative profit of $20 billion))