The world’s largest automaker by market capitalization, Tesla (TSLA), is set to join the S&P 500 on Monday on what is going to be the largest rebalancing in the history of the index.
It will result in the purchase of approximately 129.9 million shares, and trading actions will take place at the close on Friday. That is approximately 2.3X Tesla’s 3-month daily average volume (55.5m).
On top of shares bought by S&P, “closet indexers'' that do not officially pay S&P, but track the index will buy shares. Hence, high volume and volatility are expected but this is nothing new for TSLA.
Tesla will increase the earnings multiple of the index from 22.0x to 22.4x based on 2021 estimates and although it will consist of 1.5% of the market cap it will represent only 0.2% of the earnings.