Today, Tesla Inc will make its debut on the S&P 500 index, headed to be the most valuable company on the benchmark index. The debut follows the stock’s peak performance, with its shares surging by over 60% since the mid-November announcement and by close to 700% this year.
Investors using the benchmark index rushed to its shares on Friday, pushing its stock to an all-time high of $695 per share.
Tesla will replace Real-Estate stock Apartment Investment and Management Co. (Aimco) on the S&P 500 effective 21 December 2021.
The electric vehicle manufacturer will become the largest company to join the S&P 500 with a market value of close to $660 billion. The company became the sixth most valuable listed company in the US after its valuation passed Berkshire Hathaway’s last month. The company now trails behind other giants in the index like Apple, Microsoft, Amazon, Google, and Facebook.
The automaker will account for 1.69% of the index, having the fifth largest weighting on the index. Apple has the largest weighting at 6.47%, Microsoft at 5.29%, Amazon at 4.37%, and Facebook at 2.13%. According to analysts Reuters, the S&P 500 will chance one point for every $11.11 Tesla moves, pushing the index’s 2021 price/earnings ratio from 22.3 to 22.6.
Tesla is the most traded stock by value, exchanging an average of $18 billion worth of shares in a session in the past year, compared to Apple, with an average of $14 billion.
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