- Tesla’s shares rose 13% in pre-market trading on Tuesday after the electric vehicle maker finally scored an entry into the S&P 500 index.
- With a market capitalization of $400 billion, Tesla will be one of the 10 most valuable companies on the index when it joins on December 21.
- Billionaire founder Elon Musk’s wealth grew by $15 billion as the announcement sent Tesla’s shares 15% higher in after-hours trading.
- “This sort of gain is actually more than the market cap of Moderna which is pretty stunning,” Deutsche Bank analysts said.
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Tesla’s shares were trading at $460 before the opening bell, up from $408.09 per share at the end of Monday’s regular trading. The company’s stock is up about 335% year-to-date, compared to the broader S&P 500’s 11% rise.
On December 21, the company will join the prestigious S&P 500 index – one of the most important measures of success of America’s largest publicly-traded firms.
Founder and CEO Elon Musk’s wealth grew by $15 billion to about $117 billion after the announcement, when its stock rose 15% in after-hours trading. Musk is set to become the world’s third-richest person, outranking Facebook’s Mark Zuckerberg who currently has a net worth of $106 billion.
“This sort of gain is actually more than the market cap of Moderna which is pretty stunning,” Deutsche Bank analysts said, referring to the market value of the US drugmaker who, on Monday, unveiled the success of its COVID-19 vaccine candidate.
Tesla, with a market capitalization of $400 billion, was snubbed by the index committee in September this year when Etsy, Teradyne, and Catalent were announced as new entrants to the index. They replaced H&R Block, Coty, and Kohl’s.
The automaker posted strong third-quarter earnings after it delivered nearly 140,000 vehicles in the period, fueling a record operating income of $809 million and free cash flow of $1.4 billion.
Elon Musk and his team reiterated their full-year target of delivering 500,000 vehicles. Meeting that goal would require the company to produce about 181,000 cars in three months, which is 29% more than their quarterly record.