Tesla Will Join S&P 500 at Full Weight



Marking the Calendar for December 21

A decision has been reached about how Tesla (TSLA) will make its debut on the S&P 500. The electric car company will join the index all at once on Monday, December 21 rather than in piecemeal tranches. For investors, that could lead to a hectic day of trading the Friday before the electric vehicle giant joins the broad-based benchmark.

Tesla shares have climbed by nearly 600% this year, and the company is currently valued at over $550 billion. It’s the sixth largest firm in the US stock market, larger than any other car company. Once it is added, Tesla will account for 1% of the S&P 500.

Factors That Drove the Decision

Because Tesla is so large and its shares tend to trade in a volatile fashion, analysts and investors have worried about how adding the company to the S&P 500 all at once will impact markets. Before deciding how to handle Tesla’s debut on the index, the S&P 500 surveyed investors, portfolio managers, and analysts. Many traders said they recommended adding Tesla to the index in small segments, or tranches. These voices believed that one tranche in December and another in March might have less of an impact on the market overall. However, others felt strongly that the company should be added all at once, and the S&P 500 ultimately decided to bring Tesla on board in one piece.

Decision makers also recognized that on the Friday before Tesla will join the index, options and futures on stocks and indexes will expire at the same time. That happens just once every quarter, and could expand liquidity right before Tesla joins.

Making Room for Tesla

For now, it’s unclear which stock will leave the S&P 500 to make room for Tesla. As its name suggests, the S&P 500 is an index of the United States’ 500 largest publicly traded companies by market capitalization.

There’s a certain amount of mystery surrounding why and when certain companies are added to the S&P 500. Tesla was first eligible in September, but the S&P 500 committee chose to add Etsy (ETSY) and two other, smaller companies during the September rebalance.

Now the wait is almost over, and Tesla will soon become a member of the S&P 500. After markets close on December 11, the index plans to release a decision about which company it will remove in order to leave a spot for the EV giant.


Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
SOSS120201


All your finances.
All in one app.

App Store rating

Download on the App Store Get it on Google Play

ABOUT SoFi SoFi helps people achieve financial independence to realize their ambitions. Our products for borrowing, saving, spending, investing, and protecting give our more than one million members fast access to tools to get their money right. SoFi membership comes with the key essentials for getting ahead, including career advisors and connection to a thriving community of like-minded, ambitious people. For more information, visit SoFi.com. Want an easy and convenient way to manage your financial life? Get the SoFi app. For iOS and Android.


TLS 1.2 Encrypted
Equal Housing Lender