Tesla shares jump to record high ahead of S&P 500 debut
Tesla shares rose to a record high on Friday as investors geared up for the electric carmaker’s anticipated entrance into the S&P 500 index.
The company, headed up by billionaire Elon Musk, will become the most valuable ever admitted to Wall Street’s main market on Monday, accounting for more than 1 per cent of the index.
The shares have surged some 70 per cent since mid-November, when its debut in the S&P 500 was announced, and have soared 700 per cent so far in 2020.
Tesla’s shares ended up 6 per cent at a record $695 per share on Friday.
Turnover in Tesla shares topped $120bn yesterday evening, with volume exceeding 200 million as the stock traded after hours, according to Refinitiv data. Trading volume for Tesla has averaged 53 million shares over the past 10 sessions.
“That kind of volume is just sort of insane,” Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas, said of Friday’s action. Tesla shares were falling in after-hours trading, last down 3 per cent.
California-based Tesla’s stock surge has put its market value at about $660bn, making it the sixth most valuable publicly listed U.S. company, with many investors viewing it as wildly overvalued.
Tesla is by far the most traded stock by value on Wall Street, with $18bn worth of its shares exchanged on average in each session over the past 12 months, easily beating Apple, in second place with average daily trades of $14bn, according to Refinitiv.
About a fifth of Tesla’s shares are closely held by Musk, the chief executive, and other insiders. Since the S&P 500 is weighted by the amount of companies’ shares actually available on the stock market, Tesla’s influence within the benchmark will be slightly diminished compared with its overall value.