{"id":689,"date":"2020-08-02T07:04:14","date_gmt":"2020-08-02T07:04:14","guid":{"rendered":"https:\/\/businessner.com\/?p=689"},"modified":"2020-08-06T15:30:58","modified_gmt":"2020-08-06T15:30:58","slug":"tesla-is-ready-make-the-super-liquidity-event-by-hitting-the-sp-500-index","status":"publish","type":"post","link":"https:\/\/businessner.com\/tesla-is-ready-make-the-super-liquidity-event-by-hitting-the-sp-500-index\/","title":{"rendered":"Tesla is Ready To Make the \u201cSuper Liquidity Event\u201d By Hitting the S&P 500 Index"},"content":{"rendered":"

Tesla is ready to become the largest company<\/a> ever to trade in the S&P 500 Index. The company already reported profitability on a GAAP basis for the four consecutive quarters<\/a>.<\/p>\n

Tesla has a market capitalization of $304 billion<\/a>, making it a valuable company ahead of JPMorgan, UnitedHealth, and Home Depot. But despite such a great track record Tesla is yet to be added to the S&P index.<\/p>\n

According to the experts, Elon’s company already met the S&P 500 requirements by being profitable for the most recent quarter and over the past year. So the fund managers are getting themselves ready for the event where the largest company in terms of dollar value will be incorporated in the very popular S&P 500 index.<\/p>\n

\u201cAssuming it\u2019s going to be added, it\u2019ll be an all-hands-on-deck type of trading,\u201d Gerry O\u2019Reilly, a principal and portfolio manager at indexing giant Vanguard Group Inc.<\/p><\/blockquote>\n

What will happen if Tesla added to the Index?<\/h2>\n

Fund managers are saying that adding Elon\u2019s company in their funds will not be an easy task. The passive fund managers have to sell $35 billion to $40 billion worth of shares to make room for Tesla. Even the ripple effect of the volatile Tesla shares in the overall market will be hard to guess.<\/p>\n

Another consideration is that Tesla’s inclusion might force some companies to leave the S&P 500. Already two companies, E*Trade Financial Corp<\/a> and Tiffany & Co<\/a>\u00a0are possible exits to make the room for Tesla.<\/p>\n

\"Tesla
There’s a higher demand for electric vehicles like Tesla<\/figcaption><\/figure>\n

But experts fear that Tesla might bid much higher due to a possible higher demand of the stock when added to the index. They are calling it a \u201csuper liquidity event.\u201d It\u2019s like watching an astronomical event happening once a while.<\/p>\n

\u201cThe trade would basically be buy Tesla, sell everything else, and you\u2019d start to see that in the market,\u201d says Steve Sosnick, chief strategist at Interactive Brokers.<\/p><\/blockquote>\n

So we can say that Tesla\u2019s path towards the S&P 500 is an unconventional one. But the index committee at S&P Dow Jones Indices is describing the inclusion process in a different way.<\/p>\n

They are saying that the inclusion process is not automatic. That means fulfilling major requirements don\u2019t mean a direct addition. Factors based on quantitative as well as qualitative might play a role behind the final decision.<\/p>\n

\n

Read More: Tesla stock ends at new record, tops $1,200<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Tesla is ready to become the largest company ever to trade in the S&P 500 Index. The company already reported profitability on a GAAP basis for the four consecutive quarters. Tesla has a market capitalization of $304 billion, making it a valuable company ahead of JPMorgan, UnitedHealth, and Home Depot. But despite such a great […]<\/p>\n","protected":false},"author":3,"featured_media":690,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"","_seopress_titles_title":"Tesla Poised to Become Largest S&P 500 Company, Sending Shockwaves Through Market","_seopress_titles_desc":"Tesla is ready to become the largest ever company to trade in the S&P 500 Index already reported profitability for the four consecutive quarters.","_seopress_robots_index":"","tdm_status":"","tdm_grid_status":"","footnotes":""},"categories":[19],"tags":[150,161,160],"_links":{"self":[{"href":"https:\/\/businessner.com\/wp-json\/wp\/v2\/posts\/689"}],"collection":[{"href":"https:\/\/businessner.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businessner.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businessner.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/businessner.com\/wp-json\/wp\/v2\/comments?post=689"}],"version-history":[{"count":5,"href":"https:\/\/businessner.com\/wp-json\/wp\/v2\/posts\/689\/revisions"}],"predecessor-version":[{"id":811,"href":"https:\/\/businessner.com\/wp-json\/wp\/v2\/posts\/689\/revisions\/811"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businessner.com\/wp-json\/wp\/v2\/media\/690"}],"wp:attachment":[{"href":"https:\/\/businessner.com\/wp-json\/wp\/v2\/media?parent=689"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businessner.com\/wp-json\/wp\/v2\/categories?post=689"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businessner.com\/wp-json\/wp\/v2\/tags?post=689"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}