Tesla (TSLA) to Join S&P 500

(Updated - November 16, 2020 5:17 PM EST)

Tesla (NASDAQ: TSLA) will be added to the S&P 500 effective prior to the open of trading on Monday, December 21 to coincide with the December quarterly rebalance. Due to the large size of the addition, S&P Dow Jones Indices is seeking feedback through a consultation to the investment community to determine if Tesla should be added all at once on the rebalance effective date or in two separate tranches ending on the rebalance effective date. Tesla will replace a S&P 500 company to be named in a separate press release closer to the rebalance effective date.

Commenting on the news, Wedbush analyst Dan Ives said, "... this is a major feather in the cap for the Tesla bulls after much agonizing around not getting into the S&P 500 in early September."

Ives believes the sustained profitability trajectory was the final straw that got the company into the S&P 500 this time around despite all the noise around tax credit boosts.

"Clearly this is a key positive for shares and indexing purposes and ultimately removes another question mark around the Tesla story going forward," he added. The firm maintains a NEUTRAL rating and $500 price target with a bull case $700.

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