Tesla Inc. The U.S. stock is set to join major leagues on Monday, an unprecedented move by the sheer size of the Silicon Valley electric car maker’s market rating.
It is the largest company to be included in the S&P 500 Index SPX,
Come on Monday, when it starts benchmark trading, it will be the sixth largest company in the index in terms of market value, which is currently over $ 600 billion.
Stock gains have a “strong priority” before and after the S&P announcement, but are the lowest precedent for near-performance after the addition, said Bernstein analyst Tony Saconaki in a recent note.
Tesla’s fourth-quarter sales report in early January “is not expected to be a blow, so we recommend investors to take short-term profits by December 21,” he said.
Sakonaki said the 50 largest additions to the S&P 500 index since 2010 had “performed well on average” before being announced on S&P, performing more than 3% further between the announcement and the addition, and “moderately performing” in the days and months following the addition.
On average, newcomers fell 1.7% in the six months added, he said.
So far, Tesla’s rating has been over 230% over the past six months, and when expectations are high, the company will join the index after meeting criteria that include long-term profitability.
So far this year, Tesla shares have gained about 700%, compared to a 14% gain for S&P.
S&P Dow Jones Indices announced the merger of Tesla on November 16, following which it had defrauded the company in an earlier restructuring. Underlining the problem of joining a company, consulting with investors on how to go about it, finally decided Add Tesla at once.
Since then, Tesla’s shares have risen more than 60%, adding nearly $ 200 billion to today’s $ 625 billion market cap, which is General Motors’ GM.
And 18 times Ford Motor Company. F,
Joining S&P puts Tesla in a number of index-monitored funds, scattering them to multiple managed funds that had to add Tesla to their shares to balance them.
Saconaki said most of the relocation will take place after Monday.
In addition to the immediate addition to the S&P 500 index, Tesla received good news on its corporate credit front late Thursday.
S&P Global Ratings upgrades Tesla bonds to PP, which measures the company’s creditworthiness Only two ends from the preferred investment quality classification.