<p>Shares of Tesla Inc rose as much as 12% on Tuesday, adding more than $40 billion to the value of the electric carmaker and giving another boost to the fortune of billionaire Chief Executive Officer Elon Musk.</p>.<p>S&P Dow Jones Indices confirmed after markets closed on Monday that the company would be added to Wall Street's main index from Dec. 21, firing the starting gun on a major reorganization of investment funds that track the basket of stocks.</p>.<p>At $400 billion or more, Tesla's market capitalization should amount to more than 1% of the total value of the companies listed on the S&P 500, potentially making it the biggest ever addition to the index.</p>.<p>S&P DJI said on Monday the addition would require the funds tracking the index to sell about $51 billion worth of shares from their current holdings to buy Tesla shares and rebalance their portfolios in line with the index.</p>.<p>"Potentially one of the pushbacks on adding Tesla to the S&P was the elevated stock price," Credit Suisse analyst Dan Levy wrote in a note. "The stock's recent pullback provides better opportunity for index trackers to build positions."</p>.<p>Shares of the carmaker, which have risen more than five-fold this year, were up 11% at $453.42, and it was the eighth most traded stock, soon after opening in New York.</p>.<p>That valued Tesla at about $430 billion, more than the whole S&P gained on Monday after news emerged of successful Covid-19 vaccine trial data from Moderna Inc.</p>.<p>Bolstered by a decade of stock market gains, the combined market capitalization of the S&P 500 now totals close to $32 trillion, and S&P DJI data at the start of this year showed investments indexed to it reached $4.6 trillion.</p>.<p>Traders and analysts said the run in to Tesla's addition next month may see more speculative buying.</p>.<p>In 1999, Yahoo surged 64% in five trading days between the announcement that it would be added to the index and its inclusion. Yahoo's market capitalization at the time was only $56 billion.</p>.<p>"The 12% move is probably a short squeeze more than anything else," said Mark Taylor, sales trader at Mirabaud Securities, London.</p>.<p>"I believe in letting the dust settle for a few days and see how things pan out in terms of how much tracker money has gone behind this."</p>
<p>Shares of Tesla Inc rose as much as 12% on Tuesday, adding more than $40 billion to the value of the electric carmaker and giving another boost to the fortune of billionaire Chief Executive Officer Elon Musk.</p>.<p>S&P Dow Jones Indices confirmed after markets closed on Monday that the company would be added to Wall Street's main index from Dec. 21, firing the starting gun on a major reorganization of investment funds that track the basket of stocks.</p>.<p>At $400 billion or more, Tesla's market capitalization should amount to more than 1% of the total value of the companies listed on the S&P 500, potentially making it the biggest ever addition to the index.</p>.<p>S&P DJI said on Monday the addition would require the funds tracking the index to sell about $51 billion worth of shares from their current holdings to buy Tesla shares and rebalance their portfolios in line with the index.</p>.<p>"Potentially one of the pushbacks on adding Tesla to the S&P was the elevated stock price," Credit Suisse analyst Dan Levy wrote in a note. "The stock's recent pullback provides better opportunity for index trackers to build positions."</p>.<p>Shares of the carmaker, which have risen more than five-fold this year, were up 11% at $453.42, and it was the eighth most traded stock, soon after opening in New York.</p>.<p>That valued Tesla at about $430 billion, more than the whole S&P gained on Monday after news emerged of successful Covid-19 vaccine trial data from Moderna Inc.</p>.<p>Bolstered by a decade of stock market gains, the combined market capitalization of the S&P 500 now totals close to $32 trillion, and S&P DJI data at the start of this year showed investments indexed to it reached $4.6 trillion.</p>.<p>Traders and analysts said the run in to Tesla's addition next month may see more speculative buying.</p>.<p>In 1999, Yahoo surged 64% in five trading days between the announcement that it would be added to the index and its inclusion. Yahoo's market capitalization at the time was only $56 billion.</p>.<p>"The 12% move is probably a short squeeze more than anything else," said Mark Taylor, sales trader at Mirabaud Securities, London.</p>.<p>"I believe in letting the dust settle for a few days and see how things pan out in terms of how much tracker money has gone behind this."</p>