TSLA Tesla Inc

By Mengqi Sun 

Two prominent Wall Street investors pared their holdings in Tesla Inc. before Chief Executive Elon Musk disclosed publicly that he wanted to take the electric-car maker private, according to filings.

Mr. Musk needs support from a majority of existing shareholders to pull off his surprise proposal, which he revealed on Twitter last week.

Two of the biggest holders, T. Rowe Price Group Inc. and Fidelity Investments, reduced their stakes by more than 20% in the quarter ending June 30, according to FactSet. T. Rowe sold 3.7 million shares and Fidelity sold 3.1 million shares.

It is not known why T. Rowe and Fidelity sold the shares. The two investors still own more than 20 million shares, according to FactSet, and that makes them two of Tesla's five largest institutional holders. The money managers declined to comment.

Six of Tesla's other top 15 institutional shareholders also sold smaller stakes during the second quarter, according to FactSet. That included funds or accounts controlled by Vanguard Group, BlackRock Inc. and Goldman Sachs Group Inc., according to FactSet.

A Goldman spokesman declined to comment on why the shares were sold.

In a separate blog post Monday, Mr. Musk said he has talked to Saudi Arabia's sovereign-wealth fund to provide the cash to take the company private and that the buyout would require far less than $70 billion, the approximate market value based on his proposed price of $420 per share.

"My best estimate right now is that approximately two-thirds of shares owned by all current investors would roll over into a private Tesla," he wrote in the blog post.

The Securities and Exchange Commission has inquired about Mr. Musk's basis for writing on Twitter last week that he had "funding secured" for the deal.

(END) Dow Jones Newswires

August 15, 2018 17:37 ET (21:37 GMT)

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