Tesla's S&P 500 inclusion (December 2020)
S&P Dow Jones Indices announced on November 16, 2020 that Tesla would join the S&P 500, making it the largest company ever added to the index. Passive funds were forced to buy roughly $80 billion of Tesla stock before the December 21 effective date.
Tesla shares rose about 70% between the announcement and inclusion as index funds piled in.
The episode cemented the template for how index inclusion drives buying pressure in market-cap-weighted benchmarks.
The same mechanism now applies to Howard Hughes with far smaller sums: funds tracking the S&P SmallCap 600 must buy the stock once it joins on October 28.
