Electric car maker Tesla has not yet been included in the Standard & Poor’s 500 stock index. The S&P Dow Jones Indices decision is a big blow to Tesla investors, who generally expected the company to be included in the index thanks to a favorable July quarterly earnings report, Reuters reported. The company’s shares for the official closing of trading therefore fell by up to eight percent.
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S&P Dow Jones Indices has announced that from September 21, Etsy’s online retailer, semiconductor manufacturer Teradyne and pharmaceutical technology company Catalent will be part of the index. It will replace H&R Block, Coty and Kohls.
Dow Jones Indices index analyst Howard Silverblatt declined to say why Tesla was not included in the S&P 500 index. “The market is constantly changing and we must take this into account in our indices,” Silverblatt said.
Tesla’s market capitalization is more than $ 370 billion (8.3 trillion crowns). It is thus one of the most valuable companies on Wall Street. Even with stocks down 16 percent from the previous record this week, Tesla remains higher than 95 percent of current S&P 500 companies, including Johnson & Johnson and Procter & Gamble. Etsy, Teradyne and Catalent together have a market value of about $ 40 billion.
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Tesla’s shares rose by almost 400 percent this year. The company is one of the most beloved but also hated titles on Wall Street. Recently, growth in the company’s shares was driven by unexpectedly strong quarterly results published in July, but also bets that it will be included in the S&P 500 index, which would trigger massive demand for the company’s shares from funds that monitor the index.
S&P Dow Jones Indices oversees and adjusts the index quarterly, but individual companies may change more frequently. Spokesman Ray McConville told Bloomberg that the index committee could make changes to the index at any time.
The inclusion of Tesla in the prestigious index was generally expected, as the company reported a profit for the fourth consecutive quarter in July, thus overcoming the last major obstacle to inclusion. However, skeptics point out that simply meeting the criteria does not guarantee adding a company to the index.
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