Tesla set to join S&P 500
Tesla is set to join the S&P 500 before the opening of trading on Dec. 21, S&P Dow Jones Indices announced Monday.
The electric-car company run by Elon MuskElon Reeve MuskElon Musk says he ‘most likely’ has COVID-19, questions tests Elon Musk knocks ‘extremely bogus’ COVID-19 test after taking four tests in one day NASA’s International Space Station is about to become a film location MORE saw its shares jump 12 percent after the announcement.
Tesla will become one of the most valuable companies ever added to the stock index, having a market capitalization of more than $380 billion, according to Reuters.
It “will 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,” S&P Dow Jones Indices said in an online document.
S&P Dow Jones Indices noted that adding Tesla means investment funds indexed to the S&P 500 will have to sell about $51 billion worth of shares of companies already in the S&P 500 and use that money to buy shares of Tesla.
The electric-car maker will make up 1 percent of the index, according to Reuters.
S&P Dow Jones Indices asked investors in the online document whether Tesla should be included all at once on Dec. 21 or in two batches, with the first a week prior.
“Due to the large size of the addition, S&P Dow Jones Indices is seeking feedback through a consultation to the investment community to determine if Tesla should be added all at once on the rebalance effective date or in two separate tranches ending on the rebalance effective date,” S&P said in a statement.