Tesla Joins S&P 500 Today... Will the Stock Price Continue Its Soaring Rally?

The Sixth Largest Following Apple, MS, Amazon, Facebook, and Alphabet

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] American electric vehicle company Tesla will officially be included in the S&P 500 index on the 21st (local time). Having seen its stock price rise by 730% this year, Tesla will become the sixth largest company within the S&P 500 index upon inclusion.

According to CNBC and other sources on the 20th, Tesla will complete the inclusion process with the start of trading on the New York Stock Exchange on the 21st. This comes about a month after the inclusion announcement on the 16th of last month.

Tesla's market capitalization is $527 billion (approximately KRW 579.2 trillion, liquidity-adjusted), accounting for 1.69% of the S&P 500 index. Currently, it ranks fifth in size within the S&P 500 after Apple, Microsoft (MS), Amazon, and Facebook. When combining all Alphabet shares, which are distinguished based on voting rights, Tesla ranks sixth in size.

Tesla's stock price has surged more than 730% just this year. Since the decision to include Tesla in the S&P 500 index, its stock price has accelerated, rising 70% in one month. On the last trading day before inclusion, the 18th, Tesla's stock price rose 5.96% in a single day, closing at an all-time high of $695. On the 18th, Tesla's trading volume exceeded 200 million shares, more than four times the 30-day average. CNBC evaluated Tesla's inclusion in the S&P 500 as the largest in the history of influential stock indices and possibly the most dramatic single-day event.

However, it remains uncertain whether Tesla's stock price will continue its upward trend after inclusion. Most expect Tesla's stock price to rise further due to its recent five consecutive quarters of profitability and its efforts in electric vehicle production, battery development, and charging infrastructure installation. On the other hand, some analyses predict a sharp decline in Tesla's stock price soon, citing that the stock price has risen excessively compared to its earnings this year. Rob Arnott, chairman of investment firm Research Affiliates, stated that there is a bubble in the stock price and predicted that Tesla would show a weak performance after inclusion in the S&P 500.

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