Scottish Mortgage has extended its share price losses after its holdings in electric car makers Tesla and Nio saw their share prices pummelled.
Over the last year James Anderson (pictured) and Tom Slater’s trust has ballooned in value with shares more than doubling in the last year from £6.09 to £13.46 by the end of last week.
But on Monday shares in the £19.1bn trust started to slide, falling from £13.31 to £12.67 at close of play, a 4.5% decline.
Its share price kept plummeting on Tuesday, plunging by another 10% by noon on Tuesday to £11.36, hitting a two-month low.
This meant Scottish Mortgage was the worst performer of the FTSE 100 by some distance, delivering double the losses of the next worst performers British chain B&M (-4.1%) and online grocer Ocado (-3.9%).
Tesla shares dive 9% as Elon Musk tweets bitcoin looks expensive
Scottish Mortgage’s top holdings have wobbled in recent days, with Amazon down more than 2% in the last week and California biotech company Illumina down over 7%.
But its biggest setbacks were suffered by its two electric car companies, Tesla and Nio, which were caught up in a sell-off on Monday.
Tesla’s mercurial founder Elon Musk saw his personal fortune fall by $15bn yesterday after Tesla’s stock dived 9% following tweets he made over the weekend that prices of bitcoin and smaller rival cryptocurrency ethereum seemed high.
This comes two weeks after Musk’s electric car company ploughed $1.5bn (£1.1bn) into bitcoin which sent the price of the cyrptocurrency skyrocketing to a record high of $44,200.
Tesla’s shares were also weighed down by its decision to halt orders for a cheaper version of its Model Y SUV just a month after launching.
Pessimism also spread to Nio’s share price which toppled 8% to $50.68. It was the trust’s fifth largest holding at the end of January at 4.8% behind Tesla which stood at 5.1%.
Baillie Gifford reassessing Tesla exposure
Baillie Gifford has been reassessing its Tesla exposure and has significantly reduced its stake across 11 of its funds and trusts, including Scottish Mortgage, according to research from This is Money.
Last year the Edinburgh manager was forced to clip its holding in the EV company to less than 5% after the stock split.
Anderson and Slater slashed their Tesla holding in Scottish Mortgage from 8.4% at the end of December to 5.1% a month later, according to the trust’s latest factsheet. The pair have been frequently grilled over Tesla’s sky-high valuation as its shares have leapt 900% since the start of 2020.
Following the recent cut the electric car company is now the trust’s fourth largest holding.
Anderson and Slater have also been paring back their weighting in Amazon over fears of its ballooning market cap. It now makes up 5.9% of the portfolio.
Scottish Mortgage was trading at a 0.3% premium at close of play on Monday compared with the weighted IT Global sector average discount of –1.8%, according to data from the Association of Investment Companies.
Over the past year amid the coronavirus pandemic the trust sailed past peers, returning 98.7% compared to the 12.7% sector average.
