Wedbush On ‘The Final Straw’: Tesla investors were disappointed that the stock was not added to the S&P 500 index in September, analyst Daniel Ives said in a note.
Tesla’s earnings report, which signaled a sustained profitability trajectory, was “the final straw” that got the stock included in the index, the analyst said.
“Clearly this is a key positive for shares and indexing purposes and ultimately removes another question mark around theTesla story going forward,” he said.
Related Link: 48 Stocks Moving In Tuesday’s Mid-Day Session
Bigger Story Than Tesla: Tesla’s inclusion in the S&P 500 index takes a back seat to the bigger story playing out, news executive and author Joanne Lipman told CNBC.
Tesla’s inclusion in the index is “confirmation” that electric vehicles represent the future of transportation, she said.
Tesla is among the most valuable companies to ever enter into the index, with a market cap in the $400-billion range.
This creates a set of challenges for the index operator, which could add Tesla in two tranches. It is not yet clear what company Tesla will replace in the index.
“They can’t knock out the smallest [company], it doesn’t do anything,” Cramer said. “When they balance this — they almost seem to have to make everything smaller.”
TSLA Price Action: Tesla shares ended Tuesday’s session up 8.21% at $441.61.
Photo courtesy of Tesla.
© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.