Tesla’s $1 Trillion Valuation Punishes Some Wary Funds

Many stock-picking fund managers have shied away from Tesla Inc. shares and are now feeling the pain of falling behind.

Among reasons for their wariness: Tesla sports a sky-high valuation and is notoriously volatile. Indeed, on Monday, the shares slid nearly 5% after Chief Executive Elon Musk said he might sell as much as one-tenth of his stake in the company following a Twitter Poll that urged him to do so. It was the stock’s biggest drop in five months.