Impetuous Tesla the shares pushed the company's market capitalization to over $ 515 billion, a fivefold increase since the beginning of the year.
The traditionally volatile stock continued to experience price swings. But since it hit its year low in March, Tesla's share price has followed an upward trajectory that accelerated in August. Tesla's stock price, which rose 4.6% in morning trading to $ 545.62, helped blast its CEO Elon Musk into the upper stratosphere of Bloomberg's Billionaire Index. As of Tuesday, Musk's net worth has increased by $ 7.24 billion to over $ 128 billion. Only Amazon's Jeff Bezos is on his way to becoming the richest person in the world.
Tesla shares were fueled last week by news that it will be added to the S&P 500 index in December. Since Friday, the company has added more than $ 52 billion to its market cap, the equivalent of nearly a year and a half Ford Motor Co. to its valuation.
The S&P Dow Jones indices announced on November 16 that Tesla will officially join the benchmark index before trading on December 21, putting the electric carmaker in the same heavyweight company as Apple, Berkshire Hathaway and Microsoft.
When Tesla joins the S&P 500, it will be among the most valuable companies in the benchmark. Its weighting will be so influential that the S&P DJI is considering whether to add the stock to the free-float-adjusted market cap weight all at once or in two tranches.
The addition of Tesla to the S&P 500 is not just a symbolic nod. Joining the S&P 500 has real financial benefits, as investors who have funds tracked by an index will be forced to buy shares. With stock prices already exploding, this means investors will have to sell more stock to make room for Tesla.
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