Tesla joins the S&P 500 (December 2020)
S&P added Tesla to its 500-stock benchmark all at once. Index funds had to buy roughly $80 billion of Tesla shares to match the new weight. The stock rose about 70% between the announcement and the inclusion date.
Tesla shares surged into inclusion as funds rushed to buy, then swung sharply afterward.
The episode became the textbook case of how forced index buying can move a single large stock far beyond its fundamentals.
It shows what happens to the five new members: mechanical buying lifts prices on a schedule, regardless of value.
