Tesla Inc will on Monday make its much-anticipated debut into the benchmark S&P 500 index. This is after rising to a record high on Friday in a very frantic day of trading.
The most valuable company admitted to Wall Street
The company, headed by billionaire Elon Musk, will become the most valuable ever admitted to Wall Street’s main benchmark. It can account for 1.69% of the index, per S&P stock index Indices’ analyst Howard Silverblatt. The shares have surged some 70% since mid-November, when Tesla’s debut within the S&P 500 was announced here, and have soared 700% to date in 2020.
Tesla’s addition to the S&P 500 meant index-tracking funds bought $90.3 billion of shares by the top of Friday’s session. So their portfolios reflected the index, in line with Silverblatt. The change is effective before the open of trading on Monday, S&P said earlier in December, and Tesla is replacing Apartment Investment and Management Co.
Silverblatt said that for each $11.11 Tesla moves, the S&P 500 changes 1 point, while the S&P’s 2021 price/earnings ratio will rise from 22.3 to 22.6.
California-based Tesla’s stock surge has put its market price at about $660 billion. This makes it the sixth most valuable publicly listed U.S. company with many investors viewing it as wildly overvalued.
Tesla is by far the most traded stock by value on Wall Street, with $18 billion worth of its shares. Exchanged on the average in each session over the past 12 months, easily beating Apple. Which in second place with average daily trades of $14 billion, consistent with Refinitiv.
Musk closely holds a fifth of Tesla’s shares, the chief executive, and other insiders.
Tesla wasn’t immediately available for comment.
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