17 november 2020
18:17
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Tesla stock opened up 13 percent on Tuesday as a result of a long-awaited S & P500 ticket. Tesla is so big that the index maker is considering an entry in two steps.
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The world’s most valuable car company, Tesla
, comes after months of speculation on December 21 in the influential US stock market barometer S & P500. That made index manager S&P Monday evening after stock exchange known.
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One of the conditions for being added to the index is that the company in question has turned four consecutive quarters of net profitd. Tesla has already posted net profit for five consecutive quarters, making the company just as ready to be added to the prestigious index. At the beginning of September, Tesla just missed a ticket at the quarterly revision, then a gigantic disappointment. In August the stock had shot higher due to speculation on a seat. Since the beginning of this year, the share has increased by no less than 450 percent.
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Top ten spot
The stock shot up 13 percent on Tuesday at the opening of trading, good for a market value above 400 billion dollars. Tesla is expected to become one of the top ten companies in the S & P500, weighing above 1 percent, somewhere between the weight of Johnson & Johnson and Procter & Gamble. Tesla is the largest newcomer ever in the history of the S & P500 index.
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It is no surprise that Tesla’s share in a declining market is shooting higher on the news. The many trackers (listed investment funds) that shadow S & P500 will have to buy the stock because otherwise they would no longer properly reflect the index. To give you an idea, investors have already invested $ 320 billion in the SPDR (stock market sticker: SPY) alone, the tracker that allows you to buy the S&P50 basket in one click. So there is little doubt that the billions of dollars admission is triggering “technical” buy orders. Additionally, there are the myriad of fund managers who use the S & P500 as a reference index and should consider whether to include Tesla in the fund.
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Due to the size of Tesla, S&P will exceptionally start a consultation round with asset managers to avoid too big jumps around the access date – December 21. Tracker managers must buy on the date to ensure the performance of their fund continues to shadow the underlying index. “Given the large size of the newcomer, we are considering including Tesla in two steps,” said the press release. Who will replace Tesla in the prestigious index will not be announced until later this year.
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“This is an unexpectedly happy day for me,” Ross Gerber of asset manager Gerber Kawasaki told Bloomberg. The trustee is a Tesla believer with 130,000 shares held. “Last week we were analyzing the S & P500 index and we thought,” It’s incredible that Tesla is still not in that index. “
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Wonder year
The entry into the most influential Wall Street barometer is yet another milestone for the company that appears to be the first to make a profit from the construction of electric cars. The European car manufacturers – who are now rushing to catch up with the company – have yet to prove this.
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Richer than Zuckerberg
With a valuation of about 190 times the expected 2020 earnings, the stock is often labeled as expensive by analysts. Yet the Robinhoods – the youngest generation of tech-savvy investors – remain buy the stock eagerly. They believe that Tesla will largely take over the car market and are willing to pay very high amounts for it.
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Elon Musk is a great hero among the Robinhoods. Musk’s fortunes grew by $ 12 billion to $ 114 billion in 24 hours, the Bloomberg Billionaires Index shows. Musk is now officially richer than Mark Zuckerberg, the founder of Facebook. His net worth has already increased by nearly $ 90 billion this year.
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The third richest man on earth may have tested positive for corona, but financially and commercially he is doing well. Four astronauts are on their way to the space station ISS aboard a rocket from his company SpaceX. And ‘his’ Tesla now gets a place in the most prestigious stock index in the world.
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