TSLA Stock Jumps 13% After Hours as Tesla Secures Place in S&P…

Automobile giant Tesla finally makes its way to the S&P 500 on Monday after reporting five consecutive quarter in profits and becoming the world’s most valued automobile company.

The long-awaited story comes to a nice ending as American automobile giant Tesla Inc (NASDAQ: TSLA) secures a place in the country’s coveted S&P 500 index (INDEXSP: .INX). The official announcement came Monday, November 16, as S&P Dow Jones Indices said that the electric carmaker will join the benchmark index before December 21, 2020.

Tesla stock jumped 13% in the aftermarket hours on Monday. On Monday closing, TSLA stock was trading at a price of $408. However, it added another 53 points as the news broke out. Joining the S&P 500 index will also give Tesla higher respectability and identity as a blue-chip company.

The automobile giant will be trading with other heavyweights like Berkshire Hathaway Inc (NYSE: BRK.A), Apple Inc (NASDAQ: AAPL), and Microsoft Corporation (NASDAQ: MSFT). In a statement, the S&P Dow Jones Indices noted:

“Tesla will be one of the largest weight additions to the S&P 500 in the last decade, and consequently will generate one of the largest funding trades in S&P 500 history. However, Tesla itself is very liquid, and adding the stock at the upcoming December quarterly rebalancing coincides with the expiration of stock options, stock futures, stock-index options, and stock-index futures, which may help facilitate the funding trade.”

Tesla has checked all the boxes of criteria required for an entry to the S&P 500 index. Tesla has been long mulling for its entry in the S&P 500. But finally, after months of speculation, it has finally managed to secure its position. With this, Tesla gets a position in the “Index Committee” at the S&P DJI that analyzes several quantitative as well as qualitative factors.

However, Tesla had to face a temporary setback in September during the quarterly rebalancing of the index. The S&P 500 requires that the company must report four straight quarters of profit.

Begore Joining S&P 500 Tesla Reports Fifth Consecutive Quarter of Profits

Recently, Tesla reported its third-quarter revenue and the fifth consecutive quarter of profit. Setting up a new record, Tesla reported 139,300 vehicle deliveries. The TSLA stock has a phenomenal run this year multiply 5x year-to-date.

Since the beginning of 2020, the TSLA stock has appreciated 400% so far and continues to make new record highs. On Monday after hours, the TSLA stock is trading at $461. Currently, Tesla is the largest valued global automobile with a market cap of nearly $400 billion. In 2020-alone, Tesla overtook all other rivals on the home turf as well as overseas. Market analysts cheered on Tesla’s latest entry to the S&P 500 index. Ross Gerber, chief executive officer at Gerber Kawasaki Inc said:

“This was a little unexpected happy day for me. It was just kind of mind-blowing that Tesla still wasn’t in the S&P. So sure enough, here it is”.

Tesla is one of the biggest holdings for Gerber Kawasaki. The company holds 130,000 TSLA shares worth $55 million. Dan Ives, an analyst at research firm Wedbush Securities said:

“This is another major feather in the cap for Tesla bulls joining the S&P 500. It speaks to the sustained profit trajectory that Tesla is now finally getting into this elusive club after much noise on the Street.”

For those who want to find out more updates from the business world, we offer to visit this page.

Source: Read Full Article