By Jeremy C. Owens, MarketWatch
Tesla stock falls in after-hours trading after big run-up amid speculation that car company would get the nod after year of profit; S&P Dow Jones Indices adds Etsy, Catalent and Teradyne instead
Three new names will be added to the S&P 500 index this month, but none of them are Tesla Inc.
S&P Dow Jones Indices announced Friday afternoon that it will add three companies to the S&P 500 -- Catalent Inc. (CTLT) , Etsy Inc. (ETSY) and Teradyne Inc. (TER) Tesla Inc. (TSLA) was thought to be in line for the addition after announcing a fourth consecutive quarter of profitability, a requirement of the index, which many observers cited as a reason for a gigantic increase in the electric-car company's stock in recent weeks.
"S&P 500 inclusion now likely a done deal," Wedbush analyst Dan Ives said after Tesla reported a profitable quarter in July.
When reached Friday, Ives said, "The Champagne was on ice to get into the S&P 500, [it] was baked into shares."
"This was a bit of a shocker and the Street assumed this was a foregone conclusion," Ives said in an email to MarketWatch. "Tesla not getting into the S&P 500 club is a head scratcher and the stock will likely be down for the indexing implications."
Ives reiterated his neutral rating on Tesla shares in a note later Friday. Only 22% of sell-side analysts tracked by FactSet consider Tesla a "buy" as of Friday afternoon, which was actually an increase from earlier in the week (), but still well lower than other stocks in the S&P 500 index ( ).
Tesla stock has added more than 31% since announcing second-quarter earnings on the afternoon of July 22, though that performance has declined this week -- at the end of Monday's trading session, the stock had gained 56% since earnings. Shares have suffered this week in the wake of a stock split (), the announcement of a plan to sell up to $5 billion in fresh shares ( ), and insider selling ( ). Overall, the electric-car company's shares have still quintupled this year, pushing its market capitalization to $380 billion as of Friday's closing bell.
Three previous members of the S&P Midcap 400 will move up to the larger index instead, replacing three other companies that moved down to the midcap index, H&R Block Inc. (HRB) , Coty Inc. (COTY) and Kohl's Corp. (KSS) The changes will take effect before the open of trading on Sept. 21.
Tesla stock fell more than 6% in after-hours trading following the announcement. Catalent shares rose nearly 3%, Etsy shares added more than 5%, and Teradyne stock increased more than 2%.
-Jeremy C. Owens; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
September 08, 2020 08:52 ET (12:52 GMT)
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