Tesla will Break Another Record And Rise in Price
In a month, on December 21, the American electric car manufacturer Tesla will enter the S&P 500 index, according to the S&P Dow Jones Indices.
The company will break another record – before, no other member of the index was so expensive at the time of entering it. Perhaps Tesla will enter the S&P 500 in parts.
At the same time, the automaker will sharply rise in price, as it will be able to attract money from new large funds, where participation in the S&P 500 is subject to investment. The announcement of the inclusion increased the company’s quotes by 13 percent.
Tesla was expected to join the list of 505 selected companies that are traded on the US stock exchanges in September. Then the company fulfilled the main formal condition – it showed profit for four quarters in a row. However, the index committee ignored the automaker’s successes and included less popular companies in the index.
Profit in the fifth quarter and record shipments of electric vehicles forced the attitude to be reassessed. Tesla‘s capitalization reaches $ 385 billion, the entire S&P index “weighs” about $ 28 trillion.
According to CNBC, such a decision could lead to massive sell-offs in other stocks worth tens of billions of dollars, as many funds will want to invest in Tesla. The Index Committee estimates that the combined sales will reach $ 51 billion. Tesla’s value has quadrupled since the beginning of the year.
The new status, experts say, will allow Elon Musk’s company to conduct global expansion in order to increase sales. At present, its share looks too low compared to competitors, but the company has built a plant in Shanghai, and is also building new factories in the vicinity of Berlin and in American Austin. It is reported by Rambler.
Tesla will Break Another Record And Rise in Price - /10