In a much-debated historic move, #Tesla will join the S&P 500–the stock market index that measures the stock performances of top 500 companies listed on the stock exchange in December.
The company would join the #S&P 500 Index ahead of the trading on 21st December, in two phases to smoothen the transition process and the fund transfer.
Tesla, which boasts a stock market value of over $400 billion, will be among the most valuable companies added to the S&P Index, estimated to be the largest in the last decade- larger than 95% of the existing companies. After the addition, S&P #Dow Jones showed Tesla would generate one of the largest funding trades in history. This is seen as a major win for Elon Musk, the CEO of Tesla, whose wealth rocketed by $15 billion.
In 2020, Tesla’s stocks rose by 450%, making it one of the most valuable auto companies in the world, despite the productions that are only fractions of its rival companies: Toyota Motor, Volkswagen, and General Motors. The move would account for 1% of the index after the re-adjusting.
There is a downside to this, some investors believe, by stating that the Tesla Stock is a bubble ready to burst anytime. It is also a disadvantage for conservative investors invested in the index funds that will see some part of their money go to the Tesla Stock at exorbitant prices. Only time will tell if the inclusion is beneficial or will pose a problem as speculated by some.