Tesla falls after anticipated S&P inclusion fails to materialize1 min read . Updated: 05 Sep 2020, 11:24 AM IST
Elon Musk’s Tesla is widely expected to be added to the prestigious S&P benchmark after it posted a fourth consecutive quarterly profit in July.
Tesla Inc. shares tumbled 6% postmarket Friday as investors who contributed to its jaw-dropping rally this year in anticipation it may join the S&P 500 Index will have to wait for another day.
Elon Musk’s electric-vehicle maker is widely expected to be added to the prestigious benchmark after it posted a fourth consecutive quarterly profit in July, clearing the last major hurdle for consideration by S&P Dow Jones Indices, which oversees the gauge.
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Some, including Credit Suisse analyst Dan Levy, said the move might be announced Friday in order for the stock to begin trading as an S&P component this month, although he added that there was no guarantee a decision was imminent.
Instead, online retailer Etsy Inc., semiconductor manufacturer Teradyne Inc. and medical technology firm Catalent Inc. were added, replacing H&R Block Inc., Coty Inc. and Kohl’s Corp. Etsy rose 4.8% postmarket, Teradyne rose 3% and Catalent rose 3.6% on the news
Addition to the S&P 500 greatly broadens a company’s investor base as it’s included in index-tracking funds that control more than $11 trillion in assets.
Tesla shares have gained 400% this year. The stock fell as much as 8.6% in regular trading Friday, adding to an 18% decline over the previous three days, but closed with a 2.8% gain. The earlier declines may have been prompted by news of the company’s second-largest shareholder cutting its stake, as well as the company’s plan to sell as much as $5 billion in shares.
This story has been published from a wire agency feed without modifications to the text.