On Friday, Tesla’s shares jumped to a record high in the final hour of trading as investors prepared for the company’s much anticipated entrance into the benchmark S&P 500 index.
Tesla, headed by Elon Musk, is to become the most valuable ever admitted to Wall Street’s main benchmark.
The stock dropped as much as 4.2 per cent before surging to settle up 6 per cent at a new closing high of $695, giving the carmaker a market capitalisation of $658bn. More than 200m shares in Tesla, worth more than $148bn, were traded through the day, including 69m shares in the closing auction at $695.
“Everyone has known this is coming for two or three weeks, so the real question now is if it continues to be an outperformer and, if so, then what is the catalyst,” said Thomas Hayes, managing member at Great Hill Capital LLC in New York.
Apartment Investment and Management, the business that departing from S&P 500 to make room for Tesla, “is likely to outperform the index over the next year by as much as 20 per cent”, Research Associates have said.