Tesla shares have almost fallen into a bear market – dropping 19% from their record high Monday to their intraday low Thursday – as investors take profits on the electric carmaker’s dizzying ascent.
That upward surge has seen Tesla stock gain 406% year to date and 837% over the past 12 months. Strong sales and delivery numbers helped fuel the flight.
Tesla traded Thursday at $418.60, down 6.43%.
As for the selling, on Wednesday, Edinburgh-based investment firm Baillie Gifford, the largest institutional investor in the company, announced it had scaled back its stake to below 5% in line with its portfolio guidelines.
A filing with the Securities and Exchange Commission showed that the U.K.-based fund group now owns less than 5% of Tesla, down from 6.32%, according to data from FactSet.
In a statement, Baillie Gifford said that the substantial increase in Tesla’s share price meant that it needed to reduce its holding in order to reflect concentration guidelines that restrict the weight of a single stock in clients’ portfolios.
“However, we intend to remain significant shareholders (of Tesla) for many years ahead. We remain very optimistic about the future of the company,” the company said. “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.”
On Tuesday, Tesla said it would raise up to $5 billion by selling stock. On Monday, it implemented a 5-for-1 stock split.