The Smartest (and Most Profitable) Way to Play the Recent Tesla Snub
September 10, 2020 at 05:00 AM EDT
After a historic rally of 1,000% over the past year, Tesla has hit a bump in the road. You see, S&P Dow Jones Indices rebalances its indexes every quarter. A company needs to meet specific qualifications to be considered, including four consecutive quarters of profitability. So, investors eagerly await to see what stocks get added and removed when this time rolls around. And many expected Tesla to be listed on the list of new stocks being added to the S&P 500 - so imagine the panic when Tesla didn't make the cut. The decision not to add the stock to the S&P 500 surprised the entire market, especially those waiting for weeks on this decision, excited after Tesla reported a second-quarter profit in July. Tesla had ticked off many of the requirements needed to be considered for this index. Tesla is now among the top 15 largest companies in the United States when measured by market capitalization - sitting at $320 billion. This makes the electric car marker the size of long-standing giants like Nvidia. And at one point, Tesla grew to be the seventh-largest company in the United States. But size isn't all that matters when it comes to the S&P 500. Unlike other benchmarks, the S&P 500 isn't driven by a strict set of rules or qualifications. Instead, the benchmark relies on a committee to decide what gets added and removed. Ultimately, Tesla didn't satisfy the S&P 500 committee. And this snub didn't bode well for the electric car maker's stock. Tesla shares were down 19% in early trading Tuesday, wiping out more than $70 billion in market value. Before you jump at this new price tag, there's something I want you to know. There's a way you can play this TSLA snub scenario for the most profits... Full Story The post The Smartest (and Most Profitable) Way to Play the Recent Tesla Snub appeared first on Money Morning - We Make Investing Profitable . Before you jump at this new price tag, there's something I want you to know. There's a way you can play this TSLA snub scenario for the most profits... To get full access to all Money Morning content, click here About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free . Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors. Disclaimer: © 2020 Money Morning and Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201.