Tesla to join S&P 500; stock leaps by 11% overnight

Tesla to join S&P 500; stock leaps by 11% overnight

Tesla Inc's shares were up by more than 10% at the end of the trading day on Monday, after S&P Dow Jones Indices, the owner of the S&P 500 index, announced that the United States electric car-maker would join the index.

The S&P 500, which also closed at a record Monday, lost 0.8 percent to 3,598.65, while the tech-rich Nasdaq Composite Index dipped 0.2 percent to 11,897.63.

It is likely that the move will massively expand demand for Tesla's already hot shares, as index-driven buyers are forced to automatically purchase their shares.

At $400 billion, Tesla's market capitalization is a hundred times that of the S&P's smaller companies, according to Refinitiv data, and potentially making it the biggest ever addition to the index.

S&P DJI said on Monday the addition would require the funds tracking the index to sell about US$51 billion worth of shares from their current holdings to buy Tesla shares and rebalance their portfolios in line with the index.

Redmi Note 9 5G duo to Launch on November 24
Redmi Note 9 5G and Redmi Note 9 Pro 5G could come in colour options of black, red, blue, pink, white, green, purple and silver. Xiaomi Redmi Note 9 5G based on Android and packs 64GB of inbuilt storage that can be expanded via microSD card (up to 512GB).

The S&P Dow Jones Indices' S&P 500 as one of the most-followed stock market indices across the world, measuring the most valuable American companies listed on stock exchanges in the US.

The 15 percent stock boost for Tesla came as it was named for inclusion into the S&P 500 Index on November 16.

Tesla turned its fifth straight quarterly profit last month at 76 cents per share, ahead of the 57-cents-per-share estimate, while year-over-year total revenues increased 39% to $8.77 billion.

Shares of the company jumped 12 percent after the announcement was made.

Elon Musk's rising electric auto powerhouse Tesla reached another landmark Monday when it officially qualified for the prestigious S&P 500.

Related Articles