- Tesla stock price rallied 10% following the drop, adding USD 32 billion to its market value.
Tesla Inc., an American electric vehicle & clean energy company, witnessed a drop of 21% in its stock valuation in a single day, after it was excluded from the S&P 500 list.
As per credible sources, Tesla has witnessed a significant rise in its stock price in the recent past, recording a growth of over 300%. The firm has witnessed a considerable trend reversal, considering its high stock over the previous year.
However, the change in the S&P 500 list, which did not include Tesla resulted in the company’s stock price hitting the bottom line. Despite its exclusion from the list, the company managed to remain at a prominent position as compared to last year.
Wall Street analysts and investors expected Tesla to be in the S&P 500 listed after the company witnessed a profitable quarter in July 2020, which was its only obstacle for its addition in the benchmark stock index, sources claimed.
If reports are to be believed, Standard & Poor’s instead included online retailers in their list such as Etsy, a test equipment firm Teradyne, and Catalent, a pharmaceutical company. It is to be noted that these firms are much smaller in size as compared to Tesla but have shown constant profitability track record.
Tesla market capitalization is about USD 390 billion, which is over 10 times larger than Catalent, Teradyne, and Etsy’s combined stock market value which is worth USD 40 billion.
As per the working of mutual funds, S&P is required to invest in organizations mentioned in the list, which will further result in increase of the the company’s values.
Post the announcement of the S&P 500 list, Tesla’s stock price recovered by 10% and added USD 32 billion to the company’s market value.