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Tesla dumped by Saudis costing kingdom billions in gains

Jonathan Garber

Saudi Arabia dumped the majority of its Tesla stock missing out on monstrous gains in just the past few weeks.

The kingdom’s Public Investment Fund sold 8.2 million shares of the electric-vehicle maker at the end of 2019, according to a regulatory filing released on Tuesday. Those shares would be worth $7.3 billion at Tuesday’s closing price of $887.06 as Tesla's stock has soared 86.5 percent this year.

Saudi Arabia still owns 39,151 shares worth $34.7 million.

Adding insult to injury, along with missing Tesla's eye-popping run, the kingdom is getting slammed as oil prices crater tumbling into a bear market following the coronavirus outbreak, which has sickened more than 20,600 and killed 425 – mostly in China.

“A potential pandemic will be seen broadly as a negative for global GDP growth, and it could affect several industries that directly impact oil demand,” wrote the chief investment officer at UBS Global Wealth Management. “These include air travel, the hospitality industry, restaurants; and could also mute international manufacturing and trade.”


Concerns regarding the potential demand destruction caused by the virus has set off alarm bells among OPEC members and their allies.

On Monday, Saudi Arabia and Russia discussed the possibility of moving up their March meeting to February, according to Reuters. OPEC plus is considering cutting production by another 500,000 barrels per day after cutting by that amount in December. The group has removed 1.7 million barrels of oil per day since January 2017.

The Saudi government wasn’t caught completely flatfooted by oil’s plunge. In its 2020 budget, the kingdom forecast its oil revenue would plunge by 14.8 percent to 513 billion riyals ($136.7 billion) as Brent crude oil averaged $58 a barrel. The energy component finished at $53.96 a barrel on Tuesday.

While the $7.3 billion Saudi Arabia would’ve made on paper by holding onto Tesla is a drop in the bucket compared to its oil revenue, it’s not nothing. Especially considering Saudi Arabia is looking for ways to diversify its economy away from oil.

In December, the kingdom launched an initial public offering for the state-owned Saudi Aramco, raising a record $25.6 billion, valuing the oil giant at $1.7 trillion.

The money will go towards upgrading the Saudi military and helping Crown Prince Mohammed bin Salman fulfill his social agenda.


Vision 2030, which was unveiled in April 2016, aims to develop public-service sectors such as health, education, infrastructure, recreation and tourism, and to steer the Saudi economy away from its dependence on oil and gas, which currently accounts for about half of its gross domestic product.

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