New Street Research managing partner Pierre Ferragu provides insight into Tesla’s profitability, stock and future.
The S&P 500 is and will be ready when it welcomes Tesla and its monster market cap of $538 billion as its newest member.
Continue Reading Below
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TSLA | TESLA INC. | 567.60 | -18.16 | -3.10% |
The team at S&P Dow Jones Indices, after seeking feedback from the investment community, has determined the stock will be added in one shot or “at its full float-adjusted market capitalization weight effective prior to the open of trading on Monday, December 21, 2020” the firm disclosed late Monday.
Adding, “in its decision, S&P DJI considered the wide range of responses it received, as well as, among other factors, the expected liquidity of Tesla and the market’s ability to accommodate significant trading volumes on this date.”
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| SP500 | S&P 500 | 3621.63 | -16.72 | -0.46% |
CEO Elon Musk has shepherded the electric auto maker’s market cap to a category of its own creating a conundrum for the team that oversees what is considered the broadest measure of the stock market.
When Tesla was tapped for inclusion in mid-November, it was noted the stock would be “one of the largest weight additions to the S&P 500 in the last decade, and consequently will generate one of the largest funding trades in S&P 500 history” said the firm.
Had S&P Dow Jones Indices decided to break up the inclusion into “tranches” it would have been the first time in history it would have been done in parts.
TESLA TAPPED FOR S&P 500 INCLUSION
The stock has continued to climb putting the year-to-date gains at 578% as of Monday.
TESLA’S ZOOMS PAST BUFFETT’S BERKSHIRE IN MARKET VALUE
Musk’s company is now bigger than Toyota, General Motors and Ford, despite being a much younger organization and an early struggle with maintaining profitability.
S&P will disclose the company Tesla will replace after the close of trading on Dec. 11.
