2020 has been quite the ride, and it’s not over yet.
One of the craziest rides of the year has been the phenomenal growth of Tesla’s share price, and at the close of trading this Friday it will officially join the S&P500 index as the 7th largest holding.
Since the start of 2020, Tesla’s share price has grown by an astounding 657%, compared to a 16.39% total return for the S&P500 index:
The stars have aligned for Tesla bulls, but it is important to consider that its addition to the S&P500 is a zero sum game. It is forecast, that Tesla will be added as a 1.5% weighting. This implies that approximately 1.5% of all S&P500 holdings will be put up for sale to make room for Tesla’s inclusion, meaning that there will be a record amount of stock for sale.