Tesla Stock Faces ‘Epic Crash’ on First Day as Part of S&P 500
Tesla stock fell on its first official day on the S&P 500 after much anticipation and build-up since the company was announced months earlier.
At the start of this morning, Tesla shares fell more than 5%, mimicking the overall market. This is in large part due to a combination of factors including the smaller-than-expected stimulus deal and the new COVID-19 strain in the UK, which caused several countries to suspend their trips there for several days.
See: 13 Cars That Are Bad News for Tesla
Find: Tesla joins the S&P 500 on Monday and "an awful amount of money" is at stake
Tesla is the largest stock ever to be included in the index, both by rank and by absolute market capitalization, replacing Apartment Investment and Management Co. in the index.
"The inclusion of Tesla will cause dozens of index funds tracking the S&P to buy tens of billion dollars worth of stocks at Friday's closing price in order to replicate the index as closely as possible," said an S. & P statement last week. The realignment of the index - the change in the weighting of the companies in the index - is an important event as a lot of money is tied up in passive investments via mutual funds or ETFs.
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