Investor's Corner

Tesla investors are buying…and selling their TSLA shares

Tesla’s (NASDAQ: TSLA) major institutional investors are making big moves with their holdings of the EV powerhouse’s stock. New reports show that at least three large firms are modifying their TSLA holdings, either adding or selling shares after a massive 2020.

Major Tesla investment firm Baillie Gifford has sliced its holdings of the electric automaker’s stock. New data shows that the United Kingdom-based fund has sliced its TSLA holdings across “at least 11 of its funds and investment trusts,” ThisIsMoney reported. In December, Gifford’s flagship fund Scottish Mortgage held 8.4% of Tesla’s outstanding shares, cutting this down to 5.1% in January. After the trimming of its TSLA holdings, Scottish Mortgage made Tesla its fourth-largest holding in its portfolio. Before selling shares, it was the firm’s largest holding.

Other Gifford-run funds, like the Baillie Gifford Global Alpha Growth Fund and International Funds, both had TSLA drop out of their top 10 holdings completely. It is unclear if Gifford completely released all TSLA holdings from these portfolios, but it is clear the automaker is not in the top 10 holdings of either of these funds.

Another firm, Capital World Investors, also trimmed their holdings by around 11.48%, according to a 13G filing with the SEC. At one time, Capital World Investors was Tesla’s second-largest institutional investor, owning over 52 million shares. After the 11.48% cutback, Capital World now controls 46,249,648 shares, accounting for a 4.82% stake in Tesla.

However, some firms are loading up on TSLA shares once again, as the EV maker has had a slight run-up in 2021. Susquehanna Advisors also owns a 5.2% stake in Tesla with 49,569,773 shares owned. This makes it the second-largest institutional investor behind Vanguard, which holds 60.7 million shares, representing 6.5% of total ownership.

Another firm that has made some big moves is Citadel Securities, which became a top 5 institutional Tesla investor after reporting it now holds 28.5 million TSLA shares.

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While Tesla is one of the hottest stocks available to investors today, there are several reasons that some firms could trim their holdings. In fact, Gifford has done this in the past to promote more portfolio diversity, as Tesla’s 2020 rally that equated to over 700% of total growth for the year began to infiltrate too much of the firm’s holdings. The firm indicated that it was an “enforced reduction” when it made the move. However, it is unclear why Gifford chose to trim its position recently.

Other firms that chose to increase their TSLA position may be preparing for a surge in share price over the coming years. With many bullish analysts putting their price targets above $1,000 post-split for the first time, Tesla is priming itself to dominate the EV sector for years to come. With focuses on international expansion and manufacturing efficiencies, and its energy division, Tesla seems to be one of the most ideal stocks for those interested in sustainability. It has the track record to prove it.

Disclosure: Joey Klender is a TSLA Shareholder

Tesla investors are buying…and selling their TSLA shares
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