San Francisco, Nov 17 (IANS) The stock of electric car-maker Tesla soared more than 13 per cent after S&P Global said that shares of the Elon Musk-owned company will be added to the S&P 500, a broad measure of the most prominent stocks listed in the US.
Tesla which has a market cap of $390 billion will officially join the benchmark index prior to trading on December 21, the S&P Dow Jones Indices said in a statement late on Monday.
It is a milestone for Tesla that will expand its investor base and put the electric automaker in the same league as Apple, Berkshire Hathaway and Microsoft.
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"However, Tesla itself is very liquid, and adding the stock at the upcoming December quarterly rebalancing coincides with the expiration of stock options, stock futures, stock-index options, and stock-index futures, which may help facilitate the funding trade".
Since Tesla is a large company, S&P Global said it is consulting with investors as to whether to add Tesla in two tranches, or all at once, reports ZDNet.
"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," the statement read.
The inclusion on the benchmark follows Tesla's decision in August to split its shares 5 for 1. The move will help smaller investors afford Tesla stock.
Tesla shares are up 387 per cent to date this year.
In October, Tesla announced it registered its fifth straight profitable quarter, raking $331 million in profit in its third quarter, delivering 139,300 vehicles.
The electric car-maker generated $8.7 billion in revenue.
The company beat the previous record of 112,000 vehicle deliveries in the fourth quarter last year.
Tesla's cash balance increased to $14.5 billion, which includes free cash flows of $1.4 billion, its highest yet.
--IANS
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