Baillie Gifford, Tesla’s largest outside shareholder, has reduced its position in the electric auto maker after the company’s rapid share appreciation made it an outsized influence on the firm’s holdings.
A filing with the Securities and Exchange Commission on Wednesday showed that the U.K.-based fund group now owns less than 5% of Tesla, down from 6.32%, according to data from FactSet.
Shares of Tesla were down as much as 14.7% in early trading before recovering some of those losses and ending the session 5.83% lower.
In a statement, Baillie Gifford reiterated that it remains a long-term believer in Elon Musk’s company, and that the reduction in ownership was simply due to portfolio restrictions.
“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.”
Tesla shares have surged more than 465% this year through Tuesday’s close, amid broad investor enthusiasm for electric vehicles.
Part of Tesla’s share appreciation is also due to the company reporting its fourth straight quarter of profits in its July 22 report, which qualifies it for inclusion in the S&P 500. Tesla also posted better-than-expected second-quarter vehicle deliveries.
The company’s 5-for-1 stock split went into effect on Monday, leading to a more than 12% jump in shares even though stock splits are purely cosmetic. Amid Tesla’s record run, the company said Tuesday it plans to raise up to $5 billion through a new stock offering.