After showing a profit four straight quarters Tesla become eligible to be included in the S&P 500. Obviously it met the other criteria such as market cap etc.
Most people thought it was a foregone conclusion with it being the hottest stock on the street.
Dodging a High Risk Low Reward
After seeing the stock price of tesla run from 190 to roughly 2000 over the course of a year, something had to give.
The split seemed to be the capitulation event with price pushing higher the first day after the stock split 5 for 1 and then reversing hard.
Then the news of no S&P 500 came and the stock got hit again. Mind you, a part of the stock's move higher the past couple months was likely pricing in a S&P 500 add, but that doesn't account for it all.
Tesla is down roughly 20% from the split price and that would be quite the drag on the S&P 500, which is already being hit in this market selloff.
The index would likely be down a little more had tesla been included. Funny how this all played out, atleast in the short term.
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There is always this love hate relationship of the stock market with Musk. The hype pulled the price all the way up. Wait until Elon does his 'musking' on twitter and that will create a media frenzy bumping the price. But, the media speculation led price rise may not be sustainable until the other parameters are met to be included on the 500
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Yup, there had to be a period of "resting" for the stock price eventually. There will be another hype run soon enough.
Hype clearly had a massive hand in this... but the stock price had been suppressed for so long (around the 200-300 mark) by short sellers. It was the 2nd most shorted stock (after Apple) and so a bunch of those price gains occurred through several short squeezes (which of course fueled the hype train even more).
Personally I'm super long on Tesla but we'll see how that all plays out.
Yeah, that's also a factor to consider. I also think the fate of the company stock is their to lose at this point. They have enough hype supported by a couple of good quarters and they can build on that. Let's see.👍