In August and September, the price of Tesla shares rose amid expectations of inclusion in the S&P 500 and after the split, but the historic event is not destined to happen until December 21st. Tesla will become one of the ten largest companies in the S&P 500 in terms of capitalization.
By the start of trading on December 21, as noted by representatives of the S&P Dow Jones indices, Tesla shares will be included in the S&P 500. This news has already caused Tesla shares to rise 13% after trading closed last Monday. Investment fund managers will have to purchase these securities after Tesla shares are included in the index. According to experts’ forecasts, the total amount of purchases will reach $ 10 billion, therefore, against the background of the expected growth in demand, the share price has already gone up.
Before Tesla had a reason to be included in the S&P 500, the company had to report no loss for four consecutive quarters. In fact, Tesla has been operating without loss for five consecutive quarters, but this circumstance alone was not enough for inclusion in the S&P 500 index.
Tesla shares have more than quadrupled since the beginning of the year, with a current capitalization of $ 387 billion, making it the most valuable company ever included in the S&P 500 Index. The total value of assets included in this index reaches $ 11. 2 trillion, roughly $ 4.6 trillion of that amount is held by index funds. The index administration is currently consulting to determine the scheme for including Tesla shares with the S&P 500: it can go either in one approach or in two stages.
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