Tesla Passes $500B Market Cap As S&P Inclusion Approaches

After having four consecutive profitable quarters, and a fast rise after announcing a stock split earlier in 2020, Tesla Inc's TSLA stock was rising quickly in anticipation of S&P500 inclusion, hitting an all-time high of $500 on Aug, 31, 2020. But after the S&P committee released the list of new companies with Tesla missing, some of the stock's momentum was lost.

Finally, on Nov. 16, the S&P Committee announced it would be adding Tesla to the fund. The move will happen on Dec. 21.

The news has caused a new run on Tesla stock, today hitting a new all-time high of $547.55 and making Tesla worth over $500 billion. This makes Tesla worth more than Visa Inc V.

Shares closed above $500 (post-split) for the first time on Monday. Tesla's value is greater than almost the entire established auto industry.

Wow

— Elon Musk (@elonmusk) November 23, 2020

Benzinga's Take: Tesla will be one of the largest stocks ever added to the S&P 500, and this creates a unique situation. Funds will be forced to buy billions of the stock on Dec. 21, when the free float of Tesla is already low. Many shares are held by founders and retail investors that do not want to give up ownership.

The S&P committee will decide if all shares needed to be added on Dec. 21, or if buying can be split into two days to not cause too much of a demand spike.

Photo courtesy of Tesla