American auto maker Tesla, led by billionaire Elon Musk, is set to become the most expensive Wall Street ever to qualify for a major Wall Street benchmark this Monday, accounting for more than 1% of the S&P 500.
Since mid-November, when it became known about the intentions of the administration of the S&P 500 index to include Tesla shares, they have risen in price by 70%. Tesla now remains the largest vehicle manufacturer in terms of capitalization, although it lags behind many companies with a longer history in terms of production. Tesla shares rose another 6% on Friday to a record $ 695 per share.
According to Refinitiv data, Tesla's stock turnover exceeded $ 120 billion shortly after 4:00 pm ET (21:00 GMT), with trading volume exceeding 200 million as the stock traded after business hours. Tesla's trading volume averaged 53 million shares in the last 10 sessions.
"The volume is crazy," said Randy Frederick, vice president of trading and derivatives at Charles Schwab in Austin, Texas, about Friday's action.
The inclusion of Tesla could be a double-edged sword for index trackers, who are buying its volatile stock after a massive takeoff this year.
The rally in Californian Tesla shares has resulted in its market value of about $ 660 billion, making it the sixth most valuable public company in the United States, and many investors see it as grossly overvalued. Elon Musk himself has already warned investors about the overvaluation of shares three times. The Nasdaq administration, just in case, is preparing to lift the restriction on the continuation of trading if the company's stock price changes by more than 10% during one trading session. Under normal circumstances, trading would have to be stopped, but an exception is planned for Tesla shares, as demand from index funds will push the price up.
Tesla is by far the best-selling share on Wall Street, with its $ 18 billion worth of shares traded on average every session over the past 12 months, easily outperforming Apple, which is ranked second with 14 average daily trading volume. billion dollars, according to Refinitiv.
Roughly a fifth of Tesla shares are owned by Musk, the CEO and other insiders. Since the S&P 500 is weighted by the number of stocks actually available on the stock market, Tesla's impact on the test will be slightly diminished relative to its total value.