News broke late Monday after the markets closed that Tesla, Inc. (NASDAQ: TSLA) will be included in the S&P 500 beginning in December.
While the company has been controversial for years, its bottom line has proved it’s here to stay. The electric vehicle manufacturer has been profitable for five consecutive quarters.
The listing to the S&P 500 provides some legitimacy for the company that’s been dogged by short sellers for years.
The inclusion will increase buying in the short term. Index funds that track the S&P 500 will likely buy about $10 billion worth of shares.
Standard and Poor’s (now S&P Global) developed the S&P 500 in 1957 to track the largest companies in the United States.
Inclusion to the list is decided by a committee that meets once a month to fill any vacancy from mergers or faltering businesses.
Tesla’s inclusion is viewed as a vote of confidence for the entire electric vehicle and green energy sectors.
TSLA shares were trading near $437 at writing, up about 7% on the day. Shares surged after hours on Monday, trading as high as $467.
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