Elon Musk, founder of SpaceX and CEO of Tesla Inc., arrives at the Axel Springer Award ceremony in Berlin, Germany, on Tuesday, December 1, 2020.
Liesa Johannssen-Koppitz | Bloomberg | Getty Images
The inclusion of Tesla S&P 500 will be officially completed at the opening of trading on Monday.
The electric car maker will have an index of 1.69%, the fifth highest. It will be the sixth largest capital benchmark company when it counts Alphabet stock classes together.
The historic addition to the S&P 500 highlighted Tesla’s excellent 2020. The Elon Musk-led company has made five consecutive quarters profitable in the midst of increased demand for electric vehicles. Tesla shares have risen more than 730% this year, bringing the company’s market capitalization to more than $ 658 billion. (S&P Dow Jones uses floating-adjusted market value instead of total number.)
Tesla’s entry is the largest in history for the influential stock market index and perhaps the most dramatic.
Investors, including passive fund managers and active managers using the S&P 500 as a benchmark, rushed to Tesla shares in the final pre-period, pushing shares close to 6% on Friday to close the maximum $ 695 per share. More than 200 million Tesla shares changed hands during this single session, more than quadrupling the average trading volume of 30 days.
Marketing 186 times the advanced profits, Tesla is also one of the most expensive companies ever to join the S&P 500. However, its impact on benchmark valuation turned out to be less than many had expected. According to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, the S&P 500 earnings ratio in 2021 will rise to 22.6 from 22.3.
Meanwhile, as Tesla does not pay dividends, the S&P 500 dividend yield will fall to 1.53% from 1.56%, Silverblatt said.
In terms of S&P 500 performance, high-growth stocks could move the needle. For every $ 11.11 Tesla move, the S&P 500 changes 1 point, according to the index analyst.
Goldman Sachs previously estimated that the overall performance of the S&P 500 would have risen by 2 percentage points if Tesla had been a year-round component. The S&P 500 has increased by 14.8% until 2020.
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