Tesla joins S&P 500 in December

Tesla joins S&P 500 in December

November 17, 2020 0 By autotimesnews

The American automaker intends to join the well-known stock market index as early as next month.

Tesla Inc. is set to join the S&P 500 in December, a major win for CEO Elon Musk and his shareholders, triggering $ 51 billion in massive trade as index funds are forced to buy shares in the electric car maker.

Tesla shares surged 12% on Monday in extended trading after S&P Dow Jones Indices announced that the company will join the S&P 500 before trading opens on December 21.

“(Tesla) will be one of the largest additions to the S&P 500 in a decade and will therefore generate one of the largest funding deals in S&P 500 history,” the S&P Dow Jones Indices said in a statement.

With a market capitalization of over $ 380 billion, Tesla is one of the most valuable companies on Wall Street. Tesla’s inclusion in a widely tracked stock market index means that S&P 500-indexed investment funds would have to sell about $ 51 billion in shares of already S&P 500 companies and use that money to buy Tesla shares to get their portfolios right. reflected the index, according to the S&P Dow Jones index. Tesla will account for about 1 percent of the index.

In a separate press release, S&P Dow Jones Indices asked investors for their opinion on whether Tesla should be included on December 21 or in two, with the first added a week earlier due to Tesla’s unusually large market capitalization. The quarterly report, released in July, removed a major hurdle to Tesla’s potential inclusion.