Tesla’s largest outside investor reportedly discussed selling part of its stake last year


  • Baillie Gifford, the Edinburgh-based fund management company that holds a 10% stake in Tesla, last year commissioned an internal report reviewing that position, The Times of London reported Monday.
  • Baillie Gifford is the largest Tesla shareholder other than Elon Musk.
  • The “Devil’s Advocate” review came after Musk’s continued issues with the SEC, Tesla’s weak first quarter 2019 earnings, and the company’s unexpected raise of an additional $US2.7 billion in capital.
  • Ultimately, the report concluded that the case against Tesla was not strong enough to sell.
  • Watch Tesla trade live on Markets Insider.

Baillie Gifford, Tesla’s largest shareholder outside of Elon Musk, discussed selling part of its 10% stake in the automaker last year, The Times of London reported Monday, citing a recent interview with James Anderson, the partner who oversees the firm’s Tesla stake.

The Edinburgh-based fund management group even commissioned a special internal assessment known as the “Devil’s Advocate” review to help decide whether or not it should curb its bullish bet on the automaker, The Times reported. Baillie Gifford did not immediately respond to a request for comment from Markets Insider.

The review came after Tesla suffered a number of setbacks early in 2019, according to the report. In February, the US Securities and Exchange Commission sought to hold Musk in contempt of court, his second run-in with the agency. In April, the company reported dismal first quarter 2019 earnings, and in May, it had to raise an additional $US2.7 billion of capital in order to comfortably ride out the year.

Ultimately, the review concluded that while the case for retaining Tesla shares was “debatable,” the case against it was not so strong that it was necessary to sell. The review was conducted by Mark Urquhart, a senior colleague at the firm.

So far, holding onto the stake has paid off. Tesla shares have doubled in value since October 2019, and have continued to rally on strong vehicle delivery numbers and optimism around the company’s China expansion. Tesla is now the highest-valued US automaker ever and worth more than the market values on Wednesday of its rivals Ford and GM combined.

Baillie Gifford clients have made profits on paper of $US5 billion because of the decision not to reduce the Tesla stake, The Times reported.

Tesla has gained 14% year-to-date through Friday’s close.