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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.

“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.

This story has been published from a wire agency feed without modifications to the text.

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