Edinburgh-based investment management firm Baillie Gifford lowered its ownership to below 5% from 6.32%.
“The substantial increase in Tesla’s share price means that we needed to reduce our holding in order to reflect concentration guidelines which restrict the weight of a single stock in clients' portfolios,” Baillie Gifford investment manager James Anderson said in a statement.
“However, we intend to remain significant shareholders for many years ahead,” the company added. “We remain very optimistic about the future of the company.”
The announcement of Baillie Gifford’s reduced stake comes just a day after Tesla announced it would raise up to $5 billion through the sale of new shares and two days after a 5-for-1 stock split.
The stock split was announced alongside Tesla’s second-quarter results, which showed the company reached profitability for a fourth straight quarter, paving the way for its inclusion in the S&P 500.
Tesla is scheduled to hold its Battery Day on Sept. 22. Analysts have predicted the company could unveil game-changing technology at the event.
Tesla shares were up 468% this year through Tuesday.