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Tesla gets green light to join S&P 500

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Tesla gets green light to join S&P 500

S&P Dow Jones Indices confirmed after markets closed on Monday that they would add the company to Wall Street's main index from December 21, firing the starting gun on a major reorganization of investment funds that track the basket of stocks.

With a stock market value over $400 billion, Tesla will be among the most valuable companies ever added to the widely followed stock market index, larger than 95 percent of the S&P 500's existing components.

The jump in his fortune came after the stocks of the electric car-maker Tesla soared more than 13% after S&P Global said that shares of the Elon Musk-owned company would be added to the S&P 500.

Tesla's shares spiked 14% Monday (November 16) on the news.

That pace, Tesla said, should increase even further over the final months of the year as the group held to its 2020 forecast of 500,000 deliveries, a figure that suggests the fourth quarter total would need to rise past 180,000. However, it was not selected for inclusion in the index in September by the index committee at S&P Dow Jones Indices.

The announcement marks Tesla's arrival as a consistently profitable company after building up losses in its first nine years as a public company. The Q3 revenue of Tesla rose to $8.7 billion against the Wall Street expectations of $8.2 billion.

Elon Musk's rising electric auto powerhouse Tesla reached another landmark on Monday when it officially qualified for the prestigious S&P 500. That would make it the tenth most valueable company in the S&P 500.

Because of Tesla's large market capitalization, S&P Dow Jones Indices is considering splitting the addition of the company's stock into two "tranches".

Shares of Tesla surged 12 percent on Monday in extended trade after S&P Dow Jones Indices announced that the company would join the S&P 500 index prior to the opening of trading on December 21.

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