The S&P 500 is an exclusive club of the 500 biggest companies by market cap on the NYSE or Nasdaq, and the inclusion Friday of three new companies to replace three that are outgoing was a big deal–particularly because EV darling Tesla (NASDAQ:TSLA) wasn’t among those chosen for onboarding.
Because Tesla was given the cold S&P 500 shoulder, its stock is taking a beating.
The market-defying stock is down from $502.8 on September 1st to $354.67 at the time of writing on September 8th. That’s a major culling on a snub that no one expected from the S&P 500 club.
HRB), Kohl’s (KSS) and Coty (COTY), and replaced them with Etsy (ETSY), Teradyne (TER) and Catalent (CTLT). ” data-reactid=”26″>The club booted H&R Block (HRB), Kohl’s (KSS) and Coty (COTY), and replaced them with Etsy (ETSY), Teradyne (TER) and Catalent (CTLT).
Investors will be forgiven for their confusion.
They will also be forgiven for not having ever heard of Teradyne, an industrial automation and robotics company, and Catalent, a pharmaceuticals developer.
And the surprise that a crafting marketplace such as ETSY has been admitted into the club over the Tesla giant is also easy to understand.
For anyone waiting for an explanation, there won’t be one. The S&P 500 doesn’t explain itself.
Meanwhile, investors have indeed been fickle with the hype, selling off Tesla the minute the S&P 500 snubbed it. That alone goes some way to proving the S&P 500’s point.
So, yes, Tesla is one of the biggest companies in the U.S. and still remains outside the index, much to the dismay of its investors. It’s the most valuable car company in the world. Toyota, the second-most valuable, is only worth ~$215 billion.
But the index fears extremes of hype.
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Instead, we have crafting.
But NASDAQ:ETSY inclusion in the top 500 club, on the other hand, hasn’t done anything for its share price as of the time of writing:
individual crafters sell things like handmade slime, custom furniture, soap, candles–you name it–become a $13-billion monster that ends up on the S&P 500.” data-reactid=”38″>This is one few would have predicted. It’s a major coup all around to have a crafting marketplace where individual crafters sell things like handmade slime, custom furniture, soap, candles–you name it–become a $13-billion monster that ends up on the S&P 500.
But while many will be bemoaning the lack of inclusion for Tesla, ETSY is indicative of a major trend, too: The wildly exploding individual retailer economy that gets to the heart of American entrepreneurship. These aren’t your grandma’s doilies anymore.
Digital Commerce 360, and is still on the upward trend despite the removal of pandemic restrictions to some extent.
By Tom Kool for Safehaven.com
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