After showing a profit four straight quarters Tesla become eligible to be included in the S&P 500. Obviously it met the other criteria such as market cap etc.
Most people thought it was a foregone conclusion with it being the hottest stock on the street.
Dodging a High Risk Low Reward
After seeing the stock price of tesla run from 190 to roughly 2000 over the course of a year, something had to give.
The split seemed to be the capitulation event with price pushing higher the first day after the stock split 5 for 1 and then reversing hard.
Then the news of no S&P 500 came and the stock got hit again. Mind you, a part of the stock's move higher the past couple months was likely pricing in a S&P 500 add, but that doesn't account for it all.
Tesla is down roughly 20% from the split price and that would be quite the drag on the S&P 500, which is already being hit in this market selloff.
The index would likely be down a little more had tesla been included. Funny how this all played out, atleast in the short term.