Saudi Arabia’s public investment fund sold almost its entire stake in Tesla over the last quarter, just before the massive rally in the new year — missing out on billions of dollars’ worth of profit.
The Public Investment Fund of Saudi Arabia (PIF) has had a lot of interest in electric vehicles in recent years, which is ironic since it built its wealth on fossil fuels.
In 2018, when Tesla’s stock was trading at around $300 per share, PIF took a ~5% stake in Tesla and was reportedly in talks to help take the company private.
Tesla CEO Elon Musk gave up the idea to take the company private, and PIF ended up investing $1 billion in Lucid Motors, a private EV startup.
PIF kept its stake in Tesla, which added up to over 8.2 million shares in the fourth quarter of 2019.
According to a new filing, the fund sold almost all of its shares during the fourth quarter. CNBC reported today:
The fund now holds about 39,000 shares of the stock after selling 99.5% of its holding last year, according to InsiderScore.com and public filings. The fund held more than 8.2 million shares by the end of the third quarter of 2019, according to filings with the Securities and Exchange Commission.
Those shares are now worth more than $7.3 billion.
Based on an average share price of $350 per share during Q4 2019, PIF missed making about $4.5 billion with its Tesla stake.
PIF should survive, though, since they are estimated to have assets worth $320 billion.
While I am not going to shed a tear for the Saudis not being able to make much money on their Tesla investment, I am not one of those EV enthusiasts who has an issue with fossil-fuel funds and companies investing in EVs.
It’s already done. They have made their money taking fossil fuels out of the ground, burning it, and making emissions.
That money might as well now go to electrification instead of something else.
I know it’s frustrating that they are able to make money with the problem and the solution, but the alternative wouldn’t get us to our goal — full electrification — sooner.
Disclosure: I am long TSLA.
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