London — Saudi Arabia has slashed its exposure to Tesla less than four months after the carmaker’s CEO Elon Musk settled fraud charges over his claim the kingdom was ready to back a management buyout. The Saudis’ Public Investment Fund (PIF) hedged most of its 4.9% stake in Tesla with the help of bankers at JPMorgan Chase after the market closed on January 17, according to four people with direct knowledge of the trade. The arrangement means that, although it still holds the shares, the Saudi sovereign wealth fund is left with little exposure should the price fall. Its potential gains are also capped if the stock rises, freezing its $2.9bn bet on the company. The move, through a hedging programme put in place this month, marks the latest twist in the relationship between Musk and the Saudi state fund overseen by the powerful Crown Prince Mohammed bin Salman. “To the best of my knowledge, there has been no communication with PIF for months,” Musk said in an e-mail to the Financial Ti...

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