Tesla shares rose 15% to $467.50 in extended New York trading and 9.6% on Germany’s Tradegate exchange on Tuesday following news that it will Join S&P 500 on December 21, according to Bloomberg. The announcement comes following months of speculation that have driven stocks nearly fivefold this year to almost $390 billion and after the stock failed to make the cut in early September.
- Tesla will be one of the S&P 500’s most influential constituents with a weighting around those of giants such as Berkshire Hathaway Inc., Johnson & Johnson, and Procter &Gamble Co.
- Tesla’s S&P membership will broaden its investor base and offer the benefits of forced purchases by index-tracking investors and mutual funds.
- In June, Tesla’s CEO Elon Musk hinted at a strong second-quarter profit that saw shares surge 66%, fueling further speculations of S&P 500 inclusion.
- Tesla’s stock started trading on a split-adjusted basis on August 31, after the company initiated a 5-for-1 split following stock price surges making them more accessible to individual investors
- Analysts believe sustained profitability trajectory helped Tesla to make the S&P cut as the company reported $8.77 billion Q3 revenues, a rise of 39% year over year.
Tesla stock is currently gaining. TSLA: NASDAQ is up 11.28% on premarket.
