Saudis Have Hedged Tesla Stake With JPMorgan’s Help, FT Says

(Bloomberg) -- Saudi Arabia’s sovereign wealth fund has made arrangements to protect itself against a decline in Tesla Inc. shares, the Financial Times reported.

The Saudis’ Public Investment Fund hedged most of its 4.9 percent stake in Tesla through an arrangement with JPMorgan Chase & Co. bankers after the market closed Jan. 17, the FT reported, citing four people with direct knowledge of the matter. The fund still holds Tesla shares but now faces little exposure if the shares drop, according to the newspaper.

Representatives for the PIF, Tesla and JPMorgan declined to comment.

Tesla shares briefly extended declines after the report and were trading down 0.5 percent to $295.45 as of 1:25 p.m. Monday in New York. The stock is down about 11 percent this year, as an across-the-lineup price cut and job reductions have fueled concern about demand for its pricier electric vehicles.

The PIF played a key role in Elon Musk’s short-lived effort to take Tesla private last fall. The chief executive officer said the fund spoke with him several times starting in 2017 about the idea and prompted him to tweet in August that he had the funding secured to buy out shareholders. The gambit fell apart after Musk failed to line up financing.

--With assistance from Ruth David.

To contact the reporters on this story: Dana Hull in San Francisco at dhull12@bloomberg.net;Matthew Martin in Dubai at mmartin128@bloomberg.net

To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Melinda Grenier

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