By Julie Steinberg 

Baillie Gifford & Co., the Scottish investment house that is Tesla Inc.'s second-largest shareholder after Chief Executive Elon Musk, has pared its holdings in the electric-car maker, the latest ripple effect of the company's soaring market value.

Baillie Gifford said Wednesday that it had reduced its stake because it is bound by internal guidelines that govern the size of a single stock in clients' portfolios.

The Edinburgh-based investor held a 4.25% stake in Tesla as of the end of August, a securities filing showed, down from 7.67% in February and 6.32% in June. According to Tesla's current $443 billion market valuation, the stake is worth $18.8 billion.

Tesla's shares have quintupled in value this year, boosting investors' gains by billions of dollars. Earlier this week, Tesla enacted a 5-for-1 stock split, potentially making the shares more appealing to a broader base of investors.

Baillie Gifford said it intends to remain a significant shareholder in Tesla and is optimistic about the company's future, adding that it has contributed to an "energy revolution" that has helped stave off the possibility of climate disaster. The firm said it would buy shares again if Tesla's share price falters in the future.

The investment firm's Scottish Mortgage Investment Trust PLC, one of its funds that holds Tesla shares, is up nearly 70% so far this year. Baillie Gifford first bought 2.3 million shares worth $89 million in Tesla in 2013, building its holding to about 40 million shares.

Baillie Gifford manages or advises on GBP262 billion ($350 billion) in assets, according to its website.

--Adam Clark contributed to this article.

Write to Julie Steinberg at


(END) Dow Jones Newswires

September 02, 2020 09:29 ET (13:29 GMT)

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