The technology behind Tesla’s industry leading electric vehicles can’t be denied, but many financial experts have tried to cast doubt on its stock prices. The words “fluke,” “bubble” and “overvalued” have been commonplace, even while other investors have backed the brand. Then on Wednesday, Elon Musk once again silenced the doubters.
Despite the pandemic, despite the CEO calling lockdown orders “fascist” and despite every other automaker essentially going into crisis mode, Tesla reported its fourth straight quarter of profits, first reported by CNBC. That’s a milestone for the EV company — never before has it been profitable over a full year.
That consistency puts Tesla within range of a milestone many didn’t expect from the previously volatile startup: potential inclusion in the S&P 500 stock market index. As the Wall Street Journal noted, “To be considered for the index, companies must report an accumulated profit over four consecutive quarters, including the most recent.” Now, Tesla has that badge of honor.
“A spokesman for S&P Dow Jones Indices said adding a stock to the index can happen at any point once a company is eligible for consideration,” the Wall Street Journal reported. “The index rebalances four times a year, but the committee can add or delete companies at other times.”
At the time of publication, Tesla would sit comfortably in the top 20 companies of the S&P 500 in terms of market capitalization, hovering around the $295 billion mark near JPMorgan Chase & Co. and UnitedHealth Group. If Musk’s brainchild ends up slotted into the list, it would not only offer legitimacy to a company still considered a startup, but to other forward-thinking companies in the electric vehicle, autonomous driving and green technology space.
Surprised? We don’t like to say we told you so, but … we told you so.
Subscribe here for our free daily newsletter.
Thanks for reading InsideHook. Sign up for our daily newsletter and be in the know.
