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Tesla Denied Entry Into S&P 500 Index and other 🇺🇸 News
Hey Global Investor, here's what you need to know before the US markets open.
Market Snapshot 📈
S&P 500 (Friday Close) 3,426.96 −28.10 (0.81%)
NASDAQ (Friday Close) 11,313.14 −144.97 (1.27%)
FTSE 100Â (5 PM IST) 5916.38Â -20.42 (-0.34%)
NIFTY 50 (Today's Close) 11,317.35 −37.70 (0.33%)
USDINRÂ (5 PM IST) 73.84Â (1 Year +0.57%)
S&P 500 Ignores Tesla in Latest Changes to the Index
The S&P 500 bypassed Tesla in its latest three-component addition, sending the company’s shares spiraling after-hours.
What Happened: The S&P Dow Jones Indices announced the addition of Catalent, Etsy, and Teradyne to the index this month, without a reference to Tesla in the process. The EV manufacturer was supposed to be a shoo-in after four consecutive profitable quarters, a standard requirement for inclusion in the index. The momentum in Tesla’s stock in the past weeks could be partly ascribed to the expected – and now unrealized – inclusion. This is expected to put some downward pressure on the stock.
Tesla’s shares added over 31% since the company announced its Q2 earnings, with the stock splitting 5-for-1 at the end of August. The shares, which quintupled this year, have since suffered from the post-split hangover, the announcement of a plan to issue up to $5B worth of new shares, as well as news of insider selling.
In order to be included in the S&P 500 club, companies must be US-based and listed on either Nasdaq, the NYSE, or the CBOE. The market cap should be over $8.2B, with four consecutive quarters of GAAP-profit. Â Of course, even after all these conditions are met, the ultimate decision of including the company in the S&P 500 lies with the S&P Dow Jones Indices, as we have seen in the case of Tesla.
Market Reaction:Â Tesla shares fell over 6% post trading hours following the announcement on Friday. The shares are down around 15% in pre-market trading.Â
Tesla Snapshot 📈
TSLA $418.32 +11.32 (+2.78%)
Analyst Rating (36 Ratings) BUY 19%Â Â HOLD 50% Â SELL 31%
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Later Today 🕒
3.30Â PM IST:Â NFIB small-business index
12.30 AM IST (Sept 9):Â Consumer credit
Fun Fact of The Day 🌞
The hashtag symbol is technically called an octothorpe.
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