Tesla Inc tumbled as much as 20% on Tuesday after its surprise exclusion from the S&P 500 index.
Wall Street analysts and investors widely expected Elon Musk’s electric-car maker to join the S&P 500 after the company posted its fourth consecutive quarter of profitability in July.
The American electric vehicle and battery company’s failure to make it into the index may be connected to “question marks about the sustainability of regulatory emission credit sales which are currently underpinning earnings,” said Michael Dean, an analyst with Bloomberg Intelligence.
Worth mentioning here is that the make-up of the S&P 500 is decided by what’s known as the “Index Committee” at S&P Dow Jones Indices. Inclusion is based on both quantitative as well as qualitative factors.
