Adding TSLA to the S&P 500

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garsh

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#1
There's been a lot of talk lately about TSLA being added to the S&P 500 index. If that were to happen, then all of the various index funds that track the S&P500 would be required to purchase shares of TSLA, and that additional demand could result in an additional increases in the stock price.

Most being have been quoting the basic eligibility for inclusion, which can be found in this brochure:
To be eligible
for S&P 500 index inclusion, a company should be a
U.S. company, have a market capitalization of at least
USD 8.2 billion, be highly liquid, have a public float of
at least 50% of its shares outstanding, and its most
recent quarter’s earnings and the sum of its trailing
four consecutive quarters’ earnings must be positive.
S&P 500 Brochure

But the brochure itself informs the reader that there's another document that has more complete information about how companies are added:

Equity Indices Policies & Practices Methodology

I browsed it quickly. All I've really gleaned from it so far is that the S&P 500 has a committee that makes the final decisions about whether or not a new security is added. I guess the question is, would the S&P 500 actually want to add a company that is still in a rather volatile growth phase?

AMZN was added to the index in 2005. It had posted its first profit on Q4 2001. Could the S&P 500 committee take a similar "wait and see" approach to adding TSLA?

 

iChris93

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AMZN was added to the index in 2005. It had posted its first profit on Q4 2001.
It doesn’t matter when Amazon posted their first profit. When did they post their first four consecutive quarters of profit?
 

FRC

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#3
In a recent article for MARKETWATCH, Andrea Riquier references a recent study out of Tulane and Ohio University that indicates that over the last decade new inclusion in the S&P 500 actually results in a slight drop in a stock's price.
 

iChris93

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