Tesla with a Market Cap of $390 Billion to Join S&P 500 Next Month

S&P to Decide Inclusion on 21st Next Month... "Likely to Become a Top 10 Company in S&P500"
Stock Price Surges Over 10% in OTC Trading Immediately After Announcement

[Image source=AP Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] American electric vehicle company Tesla will finally be included in the S&P 500 index next month.

According to Bloomberg News and others on the 16th (local time), S&P Dow Jones Indices announced that Tesla will be included before the market opens on the 21st of next month. The S&P Dow Jones Indices' index committee reviewed Tesla in September but rejected it once, and after two months, inclusion was finally decided.

Founded in 2003 and based in Palo Alto, California, Tesla is currently a large company with a market capitalization of $386.8288 billion. CNBC reported, "Tesla will be one of the top 10 companies in the S&P 500." Bloomberg explained, "S&P Dow Jones Indices even asked investors whether Tesla should be included as one entity or split into two due to its size."

Tesla had long satisfied the condition of having a market capitalization of at least $8.2 billion. However, it took time to decide on inclusion as it failed to pass the index committee's threshold. To be included in the S&P 500 index, a company must be based in the United States, be listed on both the New York Stock Exchange or Chicago Board Options Exchange, have a market capitalization of over $8.2 billion, and have four consecutive quarters of profitability.

The Wall Street Journal (WSJ) reported that Tesla became the first company in history to achieve five consecutive quarters of profitability. In the third quarter, Tesla delivered a record 139,300 vehicles, earning $8.77 billion in revenue. Tesla aims to deliver 500,000 vehicles this year.

Following this news, foreign media reported that Tesla's stock price rose more than 10% in after-hours trading. On the day, Tesla closed at $408.09 on the New York Stock Exchange, down 0.10% from the previous day. Despite the impact of the novel coronavirus disease (COVID-19) this year, Tesla's stock price has risen nearly 400%, making it the largest automobile manufacturer by market capitalization in the world.

S&P announced that it will disclose later which companies will be excluded from the S&P 500 due to Tesla's inclusion.

This content was produced with the assistance of AI translation services.