Tesla is one of the most famous electric car manufacturers in the world. Moreover, Elon Musk is one of the wealthiest people in the world. This fact once more underlines the importance of this company based in California.
Importantly, shares of Tesla plunged on Tuesday, after the S&P 500 Index Committee that decides on new additions to the index, made the decision not to include in the S&P 500.
Notably, shares of the electric vehicle maker were down around 15% in afternoon trading. Interestingly, the stock increased by around 400% in 2020. People should take into account that, Tesla is now worth more than some of the famous automakers such as Toyota and Volkswagen.
Last week, the S&P 500 Index Committee added e-commerce site Etsy as well as automatic test equipment maker Teradyne to the S&P 500. Also, the committee decided to add the pharmaceutical firm Catalent. However, the S&P 500 Index Committee stopped short of including Tesla.
Some investors expected the committee to add the electric vehicle maker. Palo Alto-based company reported its fourth consecutive quarter of profitability in July. Despite this achievement, the committee did not include the California-based company in the S&P 500.
Tesla and interesting details
The U.S. markets were closed on September 7 because of Labor Day. Last week, Tesla stock fell more than 7% after hours on Friday.
It is worth noting that, Tesla’s move lower on Tuesday also follows a major reversal in the big technology stocks last week, amid fears that valuations reached unsustainable levels.
Interestingly, SoftBank was reportedly the mystery “Nasdaq Whale” that bought billions of dollars in call options in famous companies. The list includes Tesla, Microsoft, Netflix, as well as Amazon potentially driving up valuations.
Notably, Tesla split its stock 5-to-1 at the end of August. As a result, its value increased significantly in the run-up despite having no fundamental impact on the stock. However, the stock fell in several days, after its largest outside shareholder Baillie Gifford reduced its stake in the company.
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