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Through a filing to the SEC, Baillie Gifford & Co. disclosed that it has sold 19.23M of Tesla (TSLA) shares to meet the company’s internal guidelines. Tesla shares dropped by nearly 5% yesterday and lost another 2% after hours.
As Tesla Inc (NASDAQ: TSLA) goes through one of its biggest internal reorganizations of its stock management, it has become a beehive of activities with its investors. Through a filing to the Securities and Exchange Commission (SEC), Baillie Gifford & Co (Scottish partnership) stated that it intends to sell 19.23 million Tesla shares, to remain with approximately 39.63 million of them, around 4.25% of the outstanding shares.
According to Baillie Gifford leadership management, it made the decision primarily to meet the expected threshold of shares per portfolio.
“The substantial increase in Tesla’s share price means that we needed to reduce our holding in order to reflect concentration guidelines which restrict the weight of a single stock in clients’ portfolios,” Baillie Gifford’s James Anderson said in a statement.
“However, we intend to remain significant shareholders for many years ahead. We remain very optimistic about the future of the company. Tesla no longer faces any difficulty in raising capital at scale from outside sources but should there be serious setbacks in the share price we would welcome the opportunity to once again increase our shareholding.”
Consequently, Tesla shares have been on the red since the beginning of the month, despite the tremendous gains made in previous months. At the time of writing, Tesla shares were trading around $437.26, around 2.26% down from yesterday’s close, $447.37.
However, Tesla shares are still on the rising trend on the higher timeframe, whereby they are 3.89% up in the last five days, up 50.63% in the last one month, and notably gained over 153% in the past three months.
Focus on the Baillie Gifford Tesla Shares Sell-Off
Having sold over 2% of its Tesla shareholding, especially after Tesla announced it intends to sell $5 billion worth of shares through the bank to the public to raise capital, should raise eyebrows to the retail investors of a possible sell-off.
Being in existence for over a century and managing over $260 billion as of its last report, it makes its decision to sell a huge chunk of its Tesla shares important.
Notably, it moved from the second biggest Tesla investor to fourth. Buy the rumor and sell the news analogy perhaps have invoked Baillie Gifford & Co to act promptly to save its investors from a possible portfolio loss.
However, Tesla shares still have a bright future and likely to continue rising in the long term, supported by strong fundamentals, especially the growing market and sales of its products globally.