The Canada Pension Plan (CPP) is betting big on Tesla (TSLA), with the pension fund purchasing nearly 600,000 shares in Q4 2022, ending the year with nearly 1,000,000 shares in the electric automaker.
According to a Form 13F filing with the Securities and Exchange Commission (SEC), a filing which outlines the equity holdings of investment funds with over $100 million in assets, the CPP purchased 590,861 shares of Tesla (TSLA) in the final three months of the year. With the purchase the CPP owned 959,728 shares of Tesla, or the equivalent of $118,219,295 worth of shares as of December 31, 2022. (via Barrons)
The number of Tesla shares purchased in the final quarter is more than the entire amount the CPP had in its portfolio when it started 2022 with 483,016 shares of Tesla.
The filing doesn’t indicate when the Tesla shares were purchased, but Tesla’s share prices were quite volatile in the last few months of the year. At the beginning of October TSLA was trading at around $245 per share. From there the price quickly dropped to under $230 per share by the end of the month. As any TSLA investor will tell you the price continued to freefall, ending the year at just over $123 per share.
However if the majority of those shares were purchased at the beginning of the quarter and the CPP’s fund managers weren’t spooked by the precipitous drop, they will have made much of the money back already. Shares of TSLA have nearly doubled since the opening day of trading in 2023 and are currently hovering around $200 per share.
Tesla isn’t the only EV automaker the CPP is interested in. During the fourth quarter the fund also purchased an additional 2.2 million American depositary receipts (ADR) in NIO, bringing its stake in the Chinese EV automaker to nearly 22.3 million ADRs. The CPP also purchased another 536,000 ADRs in Li Auto for a total stake of nearly 11 millions ADRs.
The Government of Canada describes the Canada Pension Plan (CPP) as “a social insurance plan that is funded by the contributions of employees, employers and self-employed people as well as the revenue earned on CPP investments. The CPP covers virtually all employed and self-employed people in Canada, excluding Quebec, which operates its own comprehensive plan, the Quebec Pension Plan. The CPP is the second pillar of Canada’s retirement income system, which also includes the Old Age Security and the Guaranteed Income Supplement (the first pillar) and private savings (the third pillar). The CPP provides income replacement to contributors and their families in the event of retirement, disability or death. The CPP is a statutory program that is governed by the federal government and the provinces. It is enabled by the CPP legislation. Eligibility criteria must be met in order to receive benefits.”