Tesla will join the S&P 500 in December after being snubbed earlier this year

The Tesla logo is seen on a car in Los Angeles, California, U.S., July 9, 2020.  REUTERS/Lucy Nicholson     TPX IMAGES OF THE DAY

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Tesla will be added to the S&P 500 later this year, S&P Dow Jones Indices announced Monday. 

Tesla will join the exclusive club of companies prior to the open of trading on Monday, December 21. Shares of the electric-vehicle manufacturer jumped more than 13% on the news in after-hours trading. 

The S&P 500, an index of 500 large US companies, is seen as one of the most important gauges of the success of America’s largest publicly-traded firms. It is chosen by the S&P 500 Index Committee, which rebalances the group each quarter. In September, the online marketplace Etsy, robotics company Teradyne, and pharmaceutical developer Catalent joined the index, while Tesla was left out, even though it met the standards required to be added. 

Among other requirements, companies must be based in the US, have a market cap of at least $8.2 billion, be highly liquid, and have at least 50% of their shares available to the public. 

Tesla joins the index as the world’s most valuable automaker, with a market cap of nearly $400 billion. That places it firmly in the top 10 most valuable firms in the index, alongside Goliaths like Apple, Amazon, and Berkshire Hathaway. 

Even as the pandemic dealt a major blow to the global auto industry, disrupting manufacturing and supply chains worldwide, Tesla has had one of its best years to date. Last month, the EV maker reported its fifth straight profitable quarter and said it sold 139,300 cars from July through September, beating its previous quarterly sales record by more than 20,000 vehicles. 

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S&P Global did not specify which of the current 500 firms Tesla would replace, saying that it would make that announcement in a separate release. 

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Source:: Businessinsider – Tech

      

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