Get 40% Off
🤯 Perficient is up a mind-blowing 53%. Our ProPicks AI saw the buying opportunity in March.Read full update

At T. Rowe Price, top Tesla funds offer split views

Published 08/21/2018, 07:29 PM
Updated 08/21/2018, 07:30 PM
© Reuters. FILE PHOTO: A Tesla sales and service center is shown in Costa Mesa, California

By Ross Kerber

BOSTON (Reuters) - With a volatile chief executive and a potential breakthrough product starting production, Tesla Inc (O:TSLA) is a challenging stock to hold.

Just ask the managers of two well-known T. Rowe Price Inc (O:TROW) funds who came to opposite conclusions about the carmaker during the second quarter, recent commentaries show, even before Chief Executive Officer Elon Musk started tweeting about taking the carmaker private.

The split opinion matters because the enthusiasm of top investors will determine how much money Musk would need to raise.

T. Rowe Price of Baltimore remained Tesla's third-largest investor with about 12 million shares at June 30, down 24 percent from the prior quarter.

A spokesman for the firm declined to comment.

Among other top holders, Baillie Gifford & Co and BlackRock Inc (N:BLK) raised their stakes during the quarter by 3 and 7 percent respectively, filings show, while Fidelity funds as a group cut Tesla by 21 percent to 11.2 million shares.

Fidelity and BlackRock spokespeople declined to comment. A Baillie Gifford representative did not immediately comment.

Managers of the T. Rowe Price Global Technology Fund (O:PRGTX) wrote in a June 30 semiannual report that in regards to Tesla, "We trimmed our position significantly as the stock rose, feeling that the risk/return trade-off had grown less attractive at higher valuation levels."

The fund, led by Joshua Spencer, held 505,283 Tesla shares at the end of June, disclosures show, less than a sixth of the 3,192,850 shares held at the end of March, the biggest recent sale among funds tracked by Thomson Reuters Eikon. At Dec. 31 it had 2,250,300 Tesla shares.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Tesla has risen and fallen in Spencer's holdings before, which he has termed an "on-again, off-again relationship."

Tesla shares finished June at $342.95, up 29 percent from the end of the March. They closed Tuesday at $321.90, up 4 percent.

While Spencer's fund was selling Tesla, its second-largest buyer in the second quarter was T. Rowe Price Blue Chip Growth Fund (O:TRBCX). It had 1,298,653 Tesla shares at June 30, up from 821,953 at March 31, disclosures show.

In a quarterly review as of June 30, managers led by Larry Puglia wrote they added shares "as we were encouraged by the company's announcement of incremental progress toward its Model 3 production target."

"The company also reaffirmed its guidance of achieving positive earnings and cash flow in the second half of 2018 and reiterated that an additional capital raise would not be necessary to fuel operations through the end of the year," they wrote.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.