AUS
NZ
UK
CA
USA
FRA
GER
ESP
ITA
NLD
PRT
SWE
GRC
IND
POL
BRA
ZAF
RUS
CHN
UAE
California-headquartered electric vehicle maker Tesla Inc (NASDAQ:TSLA) is scheduled to be included in the broader benchmark S&P 500 from 21 December, which will make it Wall Street’s sixth largest company by market capitalization. The S&P Dow Jones Indices has recently decided to introduce Tesla in the S&P 500 index in a single step after receiving the consultation from the market participants in mid-November. Upon the announcement of Tesla’s addition in the S&P 500, the stock of the tech giant amassed a gain of nearly 61 per cent in the last one and a half months. Tesla would be the most valuable company until now to have joined the S&P 500.
(Image source: ©Kalkine Group 2020)
Tesla’s inclusion in S&P 500: 10 things to know
- With the addition of Tesla in the S&P 500 index, the investors chasing the wider index will get access to volatility and an exceptionally high price surge of Tesla shares in 2020.
- Last week on Friday, the S&P DJI had informed that Tesla is going to replace Apartment Investment and Management Co from the on 21 December. The latter will be removed from the S&P Composite 1500 indices market cap ranges.
- Initially, the S&P DJI was in deliberations with the market participants and experts for a two-tranche addition of Tesla into S&P 500. But after receiving the recommendations, the index manager decided to add Tesla at the full float adjusted market capitalisation weight.
- According to the details, the full float adjusted market capitalisation weight will be decided on the basis of 18 December closing levels.
- In the week-long consultation exercise administered by the S&P DJI, the market participants presented the suggestions that were beyond the proposed consultation.
- The expected liquidity and the anticipated trading volumes in the shares of Tesla on the date of addition have also been studied during the consultation process.
- Notably, derivatives including the options and futures constituted on indices and stocks as the underlying asset will be terminating on Monday, 21 December, the day of Tesla’s inclusion. The contract expiry could translate into escalated volumes on the trading counter leading to a smooth entry of the stock.
- Upon the successful addition of Tesla shares into S&P 500, the Elon Musk-led technology empire will become the sixth largest firm, as per the market capitalisation, after Amazon, Apple, Alphabet, Microsoft, and Facebook.
- With the humongous command of Tesla’s market capitalisation, the stock is expected to have a weightage of a little more than 1 per cent, out of the 500 constituents of S&P 500 index.
- Tesla Inc has seen a phenomenal growth in FY 20, as far as the spike in share prices is concerned. The stock of Musk-backed Tesla has zoomed more than 680 per cent defying the Covid-19-led uncertainty and persistently worrying volatility. According to the data available with Nasdaq, the stock of Tesla has extraordinarily advanced 683.91 per cent year-to-date (YTD) to $655.90 (17 December 2020) from the share price level of $83.67 as on 31 December 2019. Tesla shares last closed at $655.90, up 5.32 per cent, while Nasdaq Composite settled 0.84 per cent higher at 12,764.74.
Tesla shares (YTD performance)
(Source: Refinitiv, Thomson Reuters)
