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The news represents a big win for the electric car maker and its CEO Elon Musk.
Tesla Inc will join the S&P 500 in December, a big win for CEO Elon Musk and his shareholders, which will trigger a massive $ 51 billion swap as index funds are forced to buy the auto maker’s stock electric.
Tesla shares were up 12% Monday in extended trading after S&P Dow Jones Indices announced that the company would join the S&P 500 index ahead of the opening of trading on December 21.
“[Tesla] it will be one of the biggest additions to the S&P 500 in the past decade and as a result generate one of the largest funding exchanges in the history of the S&P 500, ”said S&P Dow Jones Indices.
With a market capitalization of over $ 380 billion, Tesla is one of the most valuable companies on Wall Street.
Tesla’s inclusion in the widely followed stock market index means that index-linked investment funds at the S&P 500 will have to sell about $ 51 billion worth of company shares already in the S&P 500 and use that money to buy Tesla stock, in so that their portfolios correctly reflect the index, according to the S&P Dow Jones indices. Tesla will account for approximately one percent of the index.
In a separate press release, S&P Dow Jones Indices asked investors for feedback on whether to include Tesla all at once on December 21, or in two tranches, with the first addition a week earlier, due to unusually market capitalization. wide of Tesla.
A successful quarterly report in July removed a major obstacle to Tesla’s potential inclusion.
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