Tesla is joining the S&P 500, S&P Dow Jones Indices announced Monday. The automaker will be added to the benchmark index prior to trading on Monday, Dec. 21.
Tesla recently reported its fifth consecutive quarter of profit on third-quarter revenue of $8.77 billion and strong delivery numbers, which upped the anticipation that the company would be added to the index.
With products including electric cars, solar panels, and battery storage systems, Tesla’s market value is more than $400 billion. The company’s stock is up about 450% in 2020, making Tesla the most valuable auto company in the world.
Tesla will also be one of the most valuable companies on the S&P 500. Its weighting will be so significant that they’re considering whether the stock should be added at the full float-adjusted market capitalization weight all at once or in two tranches.
“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,” S&P DJI said in a statement. “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.”