S&P Dow Jones: "Tesla's Inclusion in S&P 500 Index Will Be Conducted All at Once"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] S&P Dow Jones, the organization that calculates the S&P 500 index, announced on the 21st that Tesla, which is about to be included in the S&P 500 index, will be reflected in the index all at once. Previously, S&P Dow Jones stated that it was considering both a method of including Tesla, which boasts the largest market capitalization in the history of the S&P 500 index, all at once and a special method of dividing the inclusion into two times.

According to foreign media such as CNBC on the 30th (local time), S&P Dow Jones announced on the 21st that Tesla, which is about to be included in the S&P 500 index, will be included in the index all at once, and the stocks to be excluded from the existing index components will be announced on the 11th. They also added that the market capitalization applied when including Tesla's stock in the S&P 500 index will be based on the float shares.

Earlier, on the 16th of last month, S&P Dow Jones had announced Tesla's inclusion in the index and explained that it was considering both the usual method of reflecting new inclusion stocks in the index all at once and a special method of dividing the inclusion into two times, but this time they chose the method of reflecting all at once. The reason S&P Dow Jones deliberated on Tesla's inclusion method was because Tesla's market capitalization size is the largest ever for a newly included stock in the S&P 500 index, unprecedentedly large, raising the need to pay special attention to market volatility and other factors.

S&P Dow Jones explained, "We reviewed various market opinions, market capacity to absorb trading volume, and Tesla's float shares." According to Howard Silverblatt, an index analyst at S&P Dow Jones, Tesla's float market capitalization is about $437 billion (approximately 484 trillion KRW), and the trading demand volume from index funds tracking the S&P 500 index alone could reach $72.7 billion.

The S&P 500 index is a representative stock index composed of 500 large companies whose stocks are traded on the New York Stock Exchange. When a company is included in this index, index fund capital buys the company's stocks according to the index weight. According to S&P Dow Jones, the assets tracking the S&P 500 index currently amount to $11.2 trillion, with index fund capital alone reaching $4.6 trillion.