Tesla’s (NASDAQ: TSLA) market cap of over $550 billion is a tricky situation for the S&P 500. This prompted the S&P to seek feedback from the financial community on whether it will be added all at once on December 21st or in tranches. Splitting into several phases would be the first instance of doing so in the history of the index.
However, today, S&P announced the Tesla addition to the S&P 500 prior to open December 21 at full float adjusted market cap weight in a single step.
The company’s upcoming entry into the index has led to a buzz and a more than 40% jump in the company’s share value since November 16, when the listing was announced. On November 30, trading closed at $567.6. Tesla’s inclusion in the index is a big deal.
The company’s scheduled inclusion in the S&P 500 on December 21 could lead to $8 billion in demand from active US large-cap mutual funds, analysts at Goldman Sachs Group Inc. wrote. This will amount to about 1.5% of Tesla’s current market value.
“Of the 189 large-cap core funds in our universe, 157 funds that manage around $500 billion in assets under management did not hold Tesla on September 30,” the analysts wrote. Assuming those funds chose to hold Tesla at benchmark weight, they would need to buy $8 billion of the stock or about 2% of Tesla’s market value, said Goldman Sachs.