Tesla enters the S&P 500 with a weight of 1.69% into the benchmark, the fifth largest

Elon Musk, SpaceX founder and CEO of Tesla Inc. , To the Axel Springer Awards ceremony in Berlin, Germany, on Tuesday, December 1, 2020.

Lisa Johanssen Kubitz | Bloomberg | Getty Images

Tesla Standard & Poor’s 500 The listing will be officially completed at the opening of trading on Monday.

The electric vehicle maker will have a weight of 1.69% in the index, which is the fifth largest. It will be the sixth largest company in the benchmark when calculating stock classes in Alphabet together.

The historic addition of the S&P 500 has put a bow on Tesla for its flagship 2020. The company, led by Elon Musk, has achieved five consecutive profitable quarters amid growing demand for electric cars. Tesla shares are up more than 730% this year, raising the company’s market value to more than $ 658 billion. (S&P Dow Jones uses float-adjusted market value rather than direct number.)

Tesla’s entry is the largest ever for an influencing stock index, and perhaps the most dramatic.

Investors, including inactive fund managers and active managers using the S&P 500 as the benchmark, flocked to Tesla shares in the last round, pushing the stock up nearly 6% on Friday to close at an all-time high of $ 695 a share. . More than 200 million Tesla shares traded during that one-on-one session, more than four times the average trading volume over the course of 30 days.

By trading in 186 times futures earnings, Tesla is also one of the most expensive companies to ever join the S&P 500. However, its impact on the benchmark evaluation was found to be less than many had expected. The 2021 price-earnings ratio for the S&P 500 will rise to 22.6 from 22.3, according to Howard Silverblatt, chief index analyst at the S&P Dow Jones Indices.

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Meanwhile, since Tesla is not paying a dividend, the S&P 500 dividend yield will drop to 1.53% from 1.56%, Silverblatt said.

In terms of S&P 500 performance, the high-growth stock is likely to move the needle. For every $ 11.11 a Tesla move, the S&P 500 changes by 1 point, according to an index analyst.

Goldman Sachs previously estimated That the overall return of the S&P 500 would have risen by two percentage points had Tesla been a component throughout the year. So far in 2020, the S&P 500 is up 14.8%.

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