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One Of Tesla's Largest Investors Sold 99.5% Of Its Stake Before New Year's Rally

The Public Investment Fund of Saudi Arabia sold almost all of its shares in Tesla Inc. (NASDAQ: TSLA) in the fourth quarter of 2019.

Benzinga · 02/05/2020 03:34

The Public Investment Fund of Saudi Arabia sold almost all of its shares in Tesla Inc. (NASDAQ: TSLA) in the fourth quarter of 2019.

What Happened

The state-owned investment firm sold 99.5% of its 8.2 million shares last year, CNBC reported Tuesday based on a regulatory filing.

The Saudi Fund is now left with about 39,000 shares in the automaker that has seen an unprecedented surge in market value this year.

It was one of the five largest investors in the Elon Musk-led company, according to data compiled by Bloomberg.

Why It Matters

Tesla’s stock is up about 112% year-till-date at press time. The Saudi sovereign wealth fund’s shares would have been worth about $7.2 billion on Tuesday if it had held on to them.

For comparison, the stake would have been worth about $2.6 billion at the end of the third quarter last year.

The wealth fund has a controversial history with Tesla and its CEO.

Musk had prematurely announced his intent to take the automaker private in 2018 on the back of an investment from the Saudi fund.

The move ultimately led to him and Tesla separately paying $20 million in settlement charges to the United States Securities and Exchange Commission. Musk also had to relinquish his role as the company’s chairman for three years.

 

The infamous 2018 tweet from Elon Musk

Musk's infamous 2018 tweet which landed him in trouble with the SEC.

The fund had hedged its investment in Tesla in January 2019 with the help of JPMorgan & Chase (NYSE: JPM), the Financial Times reported at the time.

Saudi Arabia, under the crown prince Mohammad Bin Salman, has sought to diversify the government’s holdings away from oil, and Silicon Valley has been a major destination.

The fund also owns a substantial stake in ride-sharing company Uber Technologies Inc. (NYSE: UBER).

Price Action

Tesla's shares traded 1.91% higher in the after-hours market at $904 on Tuesday after closing the regular session 13.73% higher.