Posted on Nov 17, 2020 at 7:56 amUpdated Nov 17, 2020 8:28 AM
It’s another success for Elon Musk. The share of electric vehicle maker Tesla climbed nearly 14% overnight in electronic trading on Wall Street, after news of its upcoming entry into the S&P 500 index, which includes the largest 500 New York-based businesses. “Tesla Inc. (NASD: TSLA) will be added to the S&P 500, effective before the opening of trading on Monday, December 21, to coincide with the quarterly rebalancing in December,” the S&P company said in a statement. P Dow Jones Indices, which manages the S&P 500 and Dow Jones indices.
She specifies that, given the size of Tesla – more than $ 386 billion on the stock market – its addition could be done twice. The Californian group will replace an S&P 500 company, the name of which will be communicated later. This entry into the prestigious index has been expected since July, when Tesla announced a fourth consecutive quarter of profits, one of the criteria for entering the S&P 500.
The company already met the other key requirements: a capitalization of at least $ 8.2 billion, a high level of liquidity, and having at least half of its shares outstanding. But Tesla’s name had been absent from the changes announced in September by S&P Dow Jones Indices, which surprised the market and briefly caused the group’s stock to tumble.
Musk’s fortune estimated at $ 15 billion
This news is “a major accomplishment for those who are speculating on the rise in Tesla and had had a lot of headaches when the company did not enter the S&P 500 in early September,” notes Daniel Ives of Wedbush Securities. “This is clearly a positive from both an equity and indexing perspective and it dispels further doubt around Tesla’s progress. “
Being part of the S&P 500 will allow Tesla stock to be systematically included in many financial products that mechanically follow its fluctuations, ETFs, which should give it even more scope. The soaring stock market of the automotive group has the consequence of enriching Elon Musk, whose fortune is now estimated at 15 billion dollars. The emblematic boss of the firm has lived very rich hours since the Dragon capsule from SpaceX, his other company, docked on the night of Monday to Tuesday at the International Space Station (ISS).