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T. Rowe Sells Most Of Its Tesla Shares -- WSJ

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05/16/2019 | 06:47 am


By Akane Otani




T. Rowe Price Associates Inc. sold roughly 81% of its shares of Tesla Inc. over the first three months of the year, marking a sharp retreat for a firm that for years had been one of the electric-car maker's biggest investors.



The fund manager held 1.7 million Tesla shares as of March 31, down from 8.9 million shares at the end of 2018, according to a Wednesday filing with the Securities and Exchange Commission.



T. Rowe and Tesla declined to comment on the move.



The move by T. Rowe comes as Tesla shares have logged a 30% loss for the year through Wednesday, compared with the S&P 500's 14% gain.



Analysts have attributed the decline to worries about the company's fundraising, as well as delivery problems and tension between Chief Executive Elon Musk and federal regulators over his tweets. Evercore ISI analysts cut their target price on Tesla on Wednesday to $200 from $240.



Mr. Musk has tried to reassure investors about Tesla's prospects, saying at an April presentation that he would be able to deliver an on-demand robot taxi fleet by 2020.



Despite Mr. Musk's promises, many investors have remained skittish. Tesla shares edged down 0.2% to $231.95 on Wednesday, compared with the S&P 500's 0.6% advance.



While T. Rowe has stepped back from Tesla, it has continued to pump money into companies that analysts have touted as potential competitors in the race to develop autonomous vehicles.



The firm made an equity investment in Cruise, the driverless-car unit of General Motors Co., which was recently valued at $19 billion. It has also invested in the autonomous-vehicle startup Aurora Innovation Inc., whose chief executive helped to launch what is now Alphabet Inc.'s self-driving program, Waymo.



T. Rowe's move leaves the firm holding the smallest number of Tesla shares since 2013, according to a FactSet analysis of 13F filings. The company had ramped up its holdings in the second half of 2018, even as Tesla shares slid over Mr. Musk's "funding secured" tweet.



Because T. Rowe runs both actively managed and passive funds, some of the decline in holdings may have been spurred by money flowing out of funds, as opposed to reduced positions.



Write to Akane Otani at akane.otani@wsj.com





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