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- Tesla sank as much as 6% on Monday as the company made its S&P 500 debut.
- The automaker joined the benchmark index as its fifth-largest member at the market open on Monday.
- Tesla boasts a weighting of 1.69% in the S&P 500, landing between Facebook and Alphabet’s class A shares.
- The entry caps a wild 2020 rally for the automaker’s shares. Tesla stock sits more than 730% higher year-to-date, lifted by analyst upgrades and robust demand from retail investors.
- The Monday slide follows a turbulent Friday session that saw outsize trading volume erase a 4.2% loss and lift shares 6% into the close.
- Watch Tesla trade live here.
Tesla dipped as much as 6% on Monday as the electric automaker made its S&P 500 debut.
The company enters the benchmark with a 1.69% weighting, making it the S&P 500’s fifth-largest constituent. Only Apple, Microsoft, Amazon, and Facebook will exert a larger influence on the index’s day-to-day movements.
When counting both of Alphabet’s share classes together, Tesla becomes the index’s sixth-largest member.
Tesla’s entry in the S&P 500 follows a chaotic Friday trading session that saw shares whipsaw just minutes before markets closed. Frothy trading dragged shares 4.2% lower before a flurry of investors piling into the stock erased the loss and saw Tesla close 6% higher. Roughly 222 million shares changed hands on Friday, more than four times the stock’s average daily volume.
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Tesla’s dip does little to dent its extraordinary rally through 2020. The automaker’s shares stand more than 730% higher year-to-date, boosted by bullish analyst upgrades, strong demand from retail investors, and steady profitability.
Tesla’s membership in the S&P 500 won’t impact the index’s valuation very much, but its outsized volatility will have a “small mechanical impact” on its overall performance, Goldman Sachs analysts said in a Wednesday note. The team found, had Tesla joined the index at the start of the year, it’s massive rally would’ve lifted its total returns by two percentage points.
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To be sure, Tesla’s Monday move matches a broader market slump. US equities fell as a new strain of the coronavirus in the UK spurred travel restrictions and augmented concerns of a prolonged fight against COVID-19. Travel and energy stocks were among the hardest hit.
Tesla closed at $695 on Friday. The company has 20 “buy” ratings, 44 “hold” ratings, and 19 “sell” ratings from analysts.
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