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September 08, 2020 at 06:35PM

Tesla shares tumbled Tuesday, after Elon Musk’s electric vehicle maker was left out of the S&P 500 by the committee that decides on new additions to the index. Tesla shares were down more than 17.5% in afternoon trading. The stock has been on a tear this year, having risen around 400%, and the company is now worth more than some of the world’s largest automakers, including Toyota and Volkswagen.

On Friday, the S&P 500 Index Committee decided to add e-commerce site Etsy, automatic test equipment maker Teradyne and pharmaceutical firm Catalent to the S&P 500, but stopped short of including Tesla. Some investors had expected Tesla to be included this quarter, after it reported its fourth consecutive quarter of profitability in July.

Tesla stock dropped more than 7% after hours on Friday following the news. U.S. markets were closed Monday because of Labor Day. Tesla’s move lower Tuesday also follows a major reversal in the big technology stocks last week, amid fears that valuations had reached unsustainable levels. Japanese tech investment juggernaut SoftBank was reportedly the mystery “Nasdaq whale” that bought billions of dollars in call options in Big Tech names, including Tesla, Amazon, Microsoft and Netflix, potentially driving up valuations. SoftBank declined to comment on the reports.

Meanwhile, Nikola — an electric vehicle start-up vying to take on Tesla — revealed on Tuesday that General Motors had agreed to take an 11% stake in the firm. As part of the deal, GM will produce Nikola’s hydrogen fuel cell electric pickup truck, the Badger, by the end of 2022. Shares of Nikola jumped about 29% in premarket trading while GM jumped 6%.

Tesla shares crater more than 17% after S&P 500 snub, CNBC, Sep 8

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From: The FxPro News Team https://fxpro.news/market-snapshots/tesla-shares-crater-more-than-17-after-sp-500-snub-20200908/
Selected by fonecable.com

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