- The exclusion of Tesla from the S&P 500 index on Friday was a “brave” decision by the index committee, DataTrek said in a note on Wednesday.
- The note said the exclusion of the manufacturer of large-cap electric vehicles surprised DataTrek co-founder Nicholas Colas and that the commission’s decision could only come from a collective point of view that Tesla was “overrated”.
- In relation to its $ 465 billion market cap, Tesla is “in a more damaged position,” most likely contributing to the commission’s decision to exclude Tesla, the note said.
- Tesla traded in its last 12-month 913x price gain on Wednesday, according to YCharts.com.
- Visit the Business Insider homepage for more stories.
Tesla The exclusion from the S&P 500 index on Friday came as a surprise to many, as the manufacturer of electric vehicles with large lids met all the eligibility requirements.
Tesla fell 21% on Tuesday from Friday’s close as investors linked the S&P 500 blockade amid a tech market.
However, the decision of the S&P Dow Jones Indices index committee to exclude Tesla despite its eligibility for membership was “brave,” DataTrek co-founder Nicholas Colas said in a note Wednesday.
The commission’s decision could “have come only from a collective and committed view that Tesla is overrated,” Colas said.
Tesla traded in its last 12-month 913x price gain on Wednesday, according to YCharts.com. The S&P 500 traded with the last 12 months price gain multiplied by 21.7x, according to JPMorgan.
Aside from a sharp valuation, the commission likely believes Tesla is “basically more volatile” than the $ 3165.2 billion market capitalization on Aug. 31 could suggest, DataTrek said.
This may be due to the fact that much of the profit Tesla has made in recent quarters comes from the sale of green EV regulatory appropriations to other automakers that do not meet the mandatory annual EV production quota and not from Tesla ‘s main business of manufacturing and selling cars and solar panels.
Tesla will remain eligible for the S&P 500 if it continues to be profitable in the coming quarters.