Tesla Surges For Second Day Ahead Of S&P 500 Debut
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Shares of Tesla surged 10% to end near a record high on Wednesday, extending a two-day rally after it was announced the electric car maker will join the S&P 500.
The California company’s stock has jumped nearly 20% since S&P Dow Jones Indices announced late on Monday it would add Tesla to Wall Street’s most-watched benchmark as of Dec. 21, a change that will force index funds to buy around $50 billion (GBP 38 billion) of its stock.
A blockbuster quarterly report in July cleared a major hurdle for Tesla’s potential inclusion in the S&P 500, leading to speculation that the company, now with a market capitalization over $450 billion, might be added to the index and spark a surge in demand for its shares.
Up about 500% in 2020, Tesla has become the most valuable auto company in the world, by far, despite production that is a fraction of rivals such as Toyota Motor, Volkswagen and General Motors .
Its stock tumbled 21% in one session on Sept. 8 after it was left out of a group of companies being added to the S&P 500, underscoring how much many traders expected it to be added.
Questions & Answers
Q.When will Tesla officially join the S&P 500?
When will Tesla officially join the S&P 500?
Tesla is scheduled to be added to Wall Street's most-watched benchmark, the S&P 500, as of December 21. This announcement was made by S&P Dow Jones Indices late on Monday.
Q.How much has Tesla's stock increased since the S&P 500 inclusion announcement?
How much has Tesla's stock increased since the S&P 500 inclusion announcement?
Tesla's stock has jumped nearly 20% since S&P Dow Jones Indices announced late on Monday that it would be added to the S&P 500. Shares surged 10% on Wednesday alone.
Q.What impact will the S&P 500 inclusion have on demand for Tesla's shares?
What impact will the S&P 500 inclusion have on demand for Tesla's shares?
The inclusion in the S&P 500 will force index funds to buy around $50 billion (GBP 38 billion) of Tesla's stock. This change is expected to spark a surge in demand for its shares.
Q.Why was there speculation about Tesla's S&P 500 inclusion before the recent announcement?
Why was there speculation about Tesla's S&P 500 inclusion before the recent announcement?
Speculation about Tesla's potential inclusion followed a blockbuster quarterly report in July, which cleared a major hurdle. This led many to anticipate its addition to the index.