etsy-gets-into-s&p-500,-tesla-does-not

Etsy gets into S&P 500, Tesla does not

FILE PHOTO: Logo of Tesla is seen at a branch office in Bern

By Noel Randewich

The decision by S&P Dow Jones Indices is a blow to Tesla investors who widely expected the company to join the benchmark stock index after a blockbuster quarterly report in July cleared a major hurdle for its potential inclusion.

Shares of Etsy jumped 6% in extended trade, Teradyne rose 2%, and Catalent added 2%.

S&P Dow Jones Indices senior index analyst Howard Silverblatt declined to say why Tesla was not added to the S&P 500, which is tracked by index funds with at least $4.4 trillion in assets.

“The market is continuously changing, and we need to reflect that in our indices,” Silverblatt said.

Etsy, Teradyne and Catalent have a combined stock market value of about $40 billion.

Tesla, which is up nearly 400% so far in 2020, is among the most loved – and hated – stocks on Wall Street. It is the U.S. stock market’s highest-profile bet on the rise of renewable energy and the decline of fossil fuels, and Tesla’s Model 3 sedan has made major inroads among consumers.

Its recent stock gains have been driven by Tesla’s unexpectedly strong quarterly results released in July, as well as by bets that it would be added to the S&P 500, which would trigger massive demand for its shares from index funds that track the benchmark.

Short sellers are betting $24 billion that Tesla’s shares will fall, among the largest short levels on record for a U.S. company, in dollars, according to S3 Partners.

(Reporting by Noel Randewich in San Francisco; Additional reporting by Akanksha Rana in Bengaluru; Editing by Leslie Adler)

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