Tesla (TSLA) is excluded from the latest S&P 500 change, despite having a 9-fold value that includes all 3 new companies in the combined index.
Over the past few months, Tesla has been rumored to be included in the S&P after receiving eligibility requirements.
The S&P 500, or simply S&P, is a stock market index that measures the share performance of the 500 largest companies listed on a stock exchange in the United States.
It’s basically the U.S. The stock market is represented and is always updated to add emerging companies to better represent the market.
There are some basic eligibility requirements, such as consistent quarterly profit and high income.
Despite hitting those requirements, Tesla was not included in the change that was announced by S&P today.
The index reported today that the H&R block, Coty and Kohls have been downgraded and Etci, Teradin and Catlant are joining the S&P 500:
“The S&P Midcap 400 component will move to the S&P 500 by shifting the E&C component (NASD: ETSY), Teradin Inc. (NASD: TER), and Calant Inc. (NYSE: CTLT) H&R Block Inc. (NYSE: HRB). Inc. (NYSE: Coty) and Kohl’s Corp. (NYSE: KSS), all of these will go into the S&P Midcap 400. “
Despite that fact, Tesla is currently worth more than 9 times the combined market capitalization of the three companies.
The index committee did not comment on why Tesla was ignored.
Tesla’s stock (TSLA) rose 1 percent in post-trading trading after the announcement of the reshuffle.
Take the electric
I wouldn’t pretend to understand the S&P committee, but if your goal is to represent the US stock market, I think Tesla should be included.
It generates billions of dollars in revenue annually, is profitable for four consecutive quarters, and is valued at more than 300 billion.
What do you think? Let us know in the comments section below.
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