Tesla to join the S&P 500 in December – Roadshow

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Tesla is joining the big leagues.

Tesla

Everyone’s favorite maker of all-electric vehicles is movin’ on up in the world. It was announced on Monday that Tesla will be moving to the S&P 500 Index starting on Dec. 21. This addition is the result of the exchange’s quarterly rebalance.

This is a huge milestone for Elon Musk and Tesla because the S&P 500 is, according to Nasdaq.com, “the most respected stock market index that measures the stock performance of 500 large companies listed on stock exchanges in the United States.” This puts the company in the big leagues with corporations such as 3M, Apple and United Airlines. To be listed on the S&P 500, a firm must be based in the US, have a market capitalization of at least $8.2 billion and meet a variety of other requirements.

This news was apparently music to investors’ ears, because in early trading on Tuesday, shares of Tesla ballooned by a whopping 13%, to around $460 apiece. And with a market cap (that is, the stock price multiplied by the number of outstanding shares) of around $448 billion dollars, Tesla is considerably larger than GM, Ford, FCA, Toyota and Honda… combined, which is kind of silly, but it just shows that investors appreciate what Musk is doing. 

Tesla is a certifiable financial heavyweight. Once it’s officially listed on the S&P 500 Index, it will be one of the largest companies to join in the last decade. Underscoring its inclusion on the S&P 500, the automaker earned some $331 million in revenue in just the third quarter of 2020. For the first nine months of the year, it’s made around $451 million in profits, impressive figures to be sure.

Since it met all the requirements, it was speculated Tesla would join the S&P 500 back in September when things were reshuffled, but that, obviously, didn’t happen. The automaker joining the index in December is a welcome bit of good news for investors, employees and Tesla enthusiasts alike.

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