Elon Musk, founder of SpaceX and CEO of Tesla Inc., arrives on Tuesday, December 1, 2020, at the Axel Springer Awards Ceremony in Berlin, Germany.
Liesa Johannssen-Koppitz | Bloomberg | Getty Images
The inclusion of Tesla’s S&P 500 will be officially completed at the opening of trading on Monday.
The manufacturer of electric cars will have a share of 1.69% in the index, the fifth largest. It will be the sixth largest capitalization reference company when counting Alphabet’s share classes together.
The historic addition to the S&P 500 highlighted the remarkable Tesla of 2020. The company led by Elon Musk achieved five consecutive consecutive quarters amid 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 fluctuation-adjusted market value rather than total.)
Tesla’s entry is the largest ever 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 preliminary period, pushing shares up nearly 6% on Friday to close at an all-time high of $ 695 per share . Over 200 million Tesla shares changed hands during that session, more than four times the 30-day average trading volume.
Trading 186 times earlier, Tesla is also one of the most expensive companies to ever join the S&P 500. However, its impact on benchmark valuation has proven to be smaller than many expected. . The price-earnings ratio of the S&P 500 in 2021 will increase to 22.6 from 22.3, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.
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 stock 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 total yield of the S&P 500 would have been raised by 2 percentage points if Tesla had built up all year. The S&P 500 has so far increased by 14.8% in 2020.
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