Fund investors pumped brakes on Tesla

BOSTON: Top Tesla Inc investors Fidelity Investments and T Rowe Price cut their holdings in the second quarter and indicated they were taking profits from the electric car maker stock, which is up 65 per cent this year.

Sellers included Fidelity funds like Fidelity OTC Portfolio, which sold 1.62 million shares, or 43 per cent of its position during the quarter, as well as funds managed by T Rowe Price Group, including T Rowe Price Growth Stock Fund, which sold 1.33 million shares during the quarter or 48 per cent of its position, recent securities filings show.

Both funds remain among the ten largest fund investors in Tesla, according to Thomson Reuters data.

Other big sellers of Tesla during the quarter were Morgan Stanley funds including Morgan Stanley Institutional Growth Portfolio.

In total, institutional investors held 95.2 million shares of Tesla at the end of June, 10.7 million fewer shares than at the end of March, according to an analysis of filings by edgaronline.com.

On August 3 alone Tesla shares rose more than 6 per cent as its quarterly earnings report fuelled expectations its new Model 3 sedan would help turn the Palo Alto, California company into a mainstream carmaker. Tesla is now the highest valued US car maker with a market capitalisation of some $60 billion.

It had $3 billion cash on hand at June 30, reassuring investors who had worried after Chief Executive Elon Musk warned it would face six months of “manufacturing hell” in ramping up Model 3 production, and raised $1.8 billion in debt last week.

A commentary posted on Fidelity’s website for OTC Portfolio called Tesla a “market darling” that was the top contributor to the fund’s returns but noted some concerns.