Electric vehicle maker Tesla Inc. (NASDAQ: TSLA) will become part of the S&P 500, the latest milestone for the 17-year-old company as it continues to grow.
“Tesla will be added to the S&P 500 effective prior to the open of trading Dec. 21 to coincide with the December quarterly rebalance,” S&P Dow Jones Indices said in a statement.
The S&P 500 measures the stock performance of 500 large companies listed on stock exchanges in the United States. The index is based on market capitalization and is often used to gauge the best large-cap U.S. equities.
The S&P 500 includes some of the largest U.S. corporations, including Amazon, Alphabet, Apple, Facebook, Berkshire Hathaway, Johnson & Johnson, and Procter & Gamble.
Tesla turned its fifth straight quarterly profit last month at 76 cents per share, ahead of the 57-cents-per-share estimate, while year-over-year total revenues increased 39% to $8.77 billion.
The Palo Alto, California-based company has a market cap of around $387 billion, which would make it one of the most valuable companies in the S&P 500.
Because of Tesla’s large market capitalization, S&P Dow Jones Indices is considering splitting the addition of the company’s stock into two “tranches.”
“S&P Dow Jones Indices is seeking feedback through a consultation to the investment community to determine if Tesla should be added all at once on the rebalance effective date or in two separate tranches ending on the rebalance effective date,” it said in the announcement. “TSLA will be one of the largest weight additions to the S&P 500 in the last decade, and consequently will generate one of the largest funding trades in S&P 500 history.”
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