Tesla to join the S&P 500 stock index

 Tesla to join the S&P 500 stock index

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Tesla will be added to the S&P 500 index on Dec. 21. Based on its market value Monday, the electric car maker would be one of the top 10 companies in the benchmark index upon entry.

S&P Dow Jones Indices made the announcement after the closing bell. Tesla shares jumped nearly 14 per cent in after-hours trading. Tesla became eligible to join the S&P 500 after posting its fourth consecutive profit in the second quarter of this year.

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However, it was not selected for inclusion in the index in September by the index committee at S&P Dow Jones Indices. Tesla shares have soared 387.8 per cent this year as the company is finally making money on a consistent basis after years of losses and continues to hit milestones for deliveries of its vehicles.

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Tesla earned $331 million in the third quarter on revenue of $8.77 billion.

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The company, led by Elon Musk, has a market value of $386.83 billion as of Monday’s close. That would make it the tenth most valuable company in the S&P 500.

S&P Dow Jones Indices said Tesla will be one of the largest companies added to the S&P 500 in the past decade.

The company said it is considering adding Tesla in two stages on Dec. 14 and 21. The company Tesla is replacing in the S&P 500 will be announced at a later date, S&P Dow Jones Indices said.

© 2020 The Canadian Press