Tesla shares drop after no inventory is added to the S&P 500

Many assumed after showing profitability in the fourth consecutive quarter Tesla Corporation (Nasdaq: TSLA) To the S&P 500. With this achievement, the electric car maker qualified for entry into the index of the largest 500 companies in the United States.

After adding the S&P 500 Etsy Inc. (Nasdaq: ETSY), Teradyne Corporation (Nasdaq: Tuesday) And Catal (New York Stock Exchange: CTLTFriday evening, the lack of an announcement about Tesla sent shares lower. Meeting qualifications do not automatically mean adding a company to the index, as the committee makes the final decision on which shares to add each month.

“It was seen as an almost unanimous move based on all the metrics that Tesla was likely to enter the S&P 500 club this time around, and would therefore have a knee-jerk reaction accordingly in a white joint bar already,” said Wedbush analyst Dan Ives wrote in a note.

“Profitability metrics and forecasts are likely the catalyst that may have ruled Tesla out this time. In short, Tesla’s failure to enter the S&P 500 would be a bash for speculators who saw this as almost a lock in given all of the parameters met.”

Ives has a neutral rating on Tesla and is one of the company’s most vocal analysts.

Take benzenga: Many assumed that Tesla would be added to the S&P 500 Index. The company is currently one of the top 10 in the United States based on market cap. While it will not affect daily operations, it will harm the share price. Tesla stock fell 6.3% to $ 392 a share in Friday’s after-hours session.

Related Links:

Two problems Tesla creates for the S&P 500

“Cautious, but not bearish”: Analysts respond to lower technical stocks

Latest reviews for TSLA

View more analyst reviews for TSLA
View the latest analyst reviews

See more from Benzinga

© 2020 Benzinga.com. Benzanga does not provide investment advice. All rights reserved.