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Tesla to list on the S&P 500

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Tesla is to list on the S&P 500 next month and Will Rhind, GraniteShares founder and CEO, has commented on the news. His firm offers 3x long and 3x short ETPs on Tesla. 

Back in September, he described Tesla as the ‘Marmite of Stocks’ and today comments: “Last time we discussed Tesla, we were talking about it being added to the S&P 500 then. It was the view that it was inevitable and there was a fair amount of surprise when it didn’t get added in September, despite the massive market cap and arguably being one of the most iconic American companies, so being added now is really a validation of that,” he says.

Rhind comments that this is the largest company to be added to the S&P500 ever and given the scale of the enterprise and its iconic nature, says ‘it was about time’.

He reports that there has always been more interest in the 3x short version of his ETP. “It’s really been the story of the way that a lot of investors view that stock – more people expected a fall rather than a continued rise, but those betting on the fall have not been vindicated,” he says.

“What is so interesting about this story is that on the one hand it captures the technology zeitgeist and how some people are absolutely dogmatic in their belief that this company will change the world and then there are those who don’t buy into any of it.”

The 3.5 million shares traded short through the GraniteShares’ ETP by the naysayers at the time of the announcement were down 40 per cent, while the 22,000 long versions were up 40 per cent.

Commenting on the listing, Adam Vettese, analyst at multi-asset investment platform eToro, and definitely one who sits on the long side of the stock, says: “Coronavirus may have brought the global economy to its knees, but Tesla has continued in 2020 as though the pandemic had never happened.

“The electric car giant has kept achieving milestone after milestone and entering the S&P 500 will cap off a fine year. In 2020, Tesla has become the world’s most valuable car manufacturer and blown its sales forecasts out of the water.

“It is recent successes such as these that have made the stock one of the most popular in the world in the past few years.

“Our data shows that Tesla has been among the top 10 most traded stocks by British investors in seven out of the past 10 months, highlighting its immense popularity among stock pickers.

“Listing on the S&P 500 next month will see Tesla gain access to vast additional funding as its shares are added to passive investment funds containing trillions of assets.

“Tesla is currently about 12 per cent off its peak share price and it looks likely that the induction into the S&P500 next month could see it hit a new record valuation well before the end of the year.”

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