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Tesla (TSLA) excluded from S&P500 reshuffle despite being worth 9x all 3 new firms combined

2 min read

Tesla (TSLA) has been excluded from the latest S&P500 reshuffle despite being worth 9 times more than all 3 new companies being included in the index combined.

Over the last few months, Tesla has been rumored to be included in the S&P after it achieved the requirements for eligibility.

The S&P 500, or simply the S&P, is a stock market index that measures the stock performance of 500 large companies listed on stock exchanges in the United States.

It is basically a representation of the U.S. stock market and it is often updated to add growing companies in order to better represent the market.

There are a few basic eligibility requirements, like consecutive quarterly profit and high revenue.

Despite hitting those requirements, Tesla wasn’t included in a reshuffle that was announced today by the S&P.

The index reported today that H&R Block, Coty, and Kohl’s were downgraded and Etsy, Teradyne, and Catalent are joining the S&P500:

“S&P MidCap 400 constituents Etsy Inc. (NASD:ETSY), Teradyne Inc. (NASD:TER), and Catalent Inc. (NYSE:CTLT) will move to the S&P 500, replacing H&R Block Inc. (NYSE:HRB) Coty Inc. (NYSE:COTY) and Kohl’s Corp. (NYSE:KSS), all of which will move to the S&P MidCap 400.”

That’s despite the fact that Tesla is currently worth more than 9 times the market capitalizations of all three of those companies combined.

The Index Committee didn’t comment on why Tesla was overlooked.

Tesla’s stock (TSLA) fell over 6% in aftermarket trading after the announcement of the reshuffle didn’t include the automaker.

Electrek’s Take

I won’t pretend to understand the S&P committee, but if your goal is to be representative of the US stock market, I would think that Tesla should be included.

It generates tens of billions in revenue per year, has been profitable for 4 quarters in a row, and it is worth over $300 billion.

What do you think? Let us know in the comment section below.

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