Tesla shares slump as S&P 500 inclusion remains elusive

Tesla has been a standout performer in the US stock market this year.
By :
| Updated on: 08 Sep 2020, 03:30 PM
File photo - The Tesla logo is seen on a car in Los Angeles, California. (REUTERS)
File photo - The Tesla logo is seen on a car in Los Angeles, California. (REUTERS)
File photo - The Tesla logo is seen on a car in Los Angeles, California. (REUTERS)
File photo - The Tesla logo is seen on a car in Los Angeles, California.

Tesla Inc. shares slumped in U.S. pre-market trading on Tuesday after the electric-vehicle maker missed out on being included in the S&P 500 Index, taking investors who had bet on its entry to the benchmark by surprise.

Tesla shares fell about 10% pre-market in the first day of trading since Friday’s news. Instead of Elon Musk’s Tesla, S&P Dow Jones Indices added online retailer Etsy Inc., chip gear maker Teradyne Inc. and medical technology firm Catalent Inc.

Similar Cars

Find More Cars
Tata Tigor Ev (HT Auto photo)
Tata Tigor Ev
Electric | Automatic
₹11.99 - 13.14 Lakhs*Onwards
Tata Altroz Ev (HT Auto photo)
UPCOMING
Tata Altroz Ev
 
₹ 12 - 15 Lakhs* *Expected Price
Tata Nexon Ev (HT Auto photo)
Tata Nexon Ev
Electric | Automatic
₹13.99 - 16.85 Lakhs*Onwards
Tata Nexon Ev Max (HT Auto photo)
Tata Nexon Ev Max
Electric | Automatic
₹17.74 - 19.24 Lakhs*Onwards
Mg Zs Ev (HT Auto photo)
Mg Zs Ev
Electric | Automatic
₹21 - 24.68 Lakhs*Onwards

“There may be question marks about the sustainability of regulatory emission credit sales which are currently underpinning earnings," said Michael Dean, an analyst with Bloomberg Intelligence. “This may have influenced its failure to make it into the S&P 500."

Tesla not being included likely reflects the challenges in adding a firm of that size to the index, Credit Suisse analyst Dan Levy wrote in a note on Sept. 6. Levy added that Tesla is still expected to be added to the index, however.

Tesla has been a standout performer in the US stock market this year, soaring 400% through Friday’s close -- the second best performance in the Nasdaq 100 Index behind Zoom Video Communications Inc.

The carmaker reported its fourth quarterly profit in a row in July and its much-hyped “Battery Day" event, to be held later this month, may also have boosted optimism since many investors expect the company to unveil new technologies that day.

Tesla shares entered correction territory last week, following news of the company’s largest shareholder after Musk cutting its stake, as well as the market slowly digesting Tesla’s plan to sell as much as $5 billion in shares.

First Published Date: 08 Sep 2020, 03:30 PM IST
Recommended For You
View All
NEXT ARTICLE BEGINS

Please provide your details to get Personalized Offers on

Choose city
+91 | Choose city
Choose city
Choose city
By clicking VIEW OFFERS you Agree to our Terms and Privacy Policy

Dear Name

Please verify your mobile number.

+91 | Choose city