It was on Monday when Tesla was first listed in the S&P 500. However, it was not the best day for its founder, billionaire Elon Musk. This is because his shares declined by almost $ 8.8 billion at the end of trading. This data was published by the online ranking of Forbes' Real Time billionaires.
Elon Musk, an American entrepreneur, inventor and head of SpaceX and Tesla, ranked second in the Forbes Real Time list of billionaires. However, the billionaire fell a line lower after the inclusion of Tesla shares in the S&P 500 index and the subsequent sales of the company's securities. In the ranking of the richest people in the world, he lagged behind Jeff Bezos (founder of Amazon) and Bernard Arnault (head of the Louis Vuitton group of companies), but at the same time, he was ahead of Bill Gates.
Tesla shares entered the S&P 500 index instead of the real estate investment fund Apartment Investment & Management before Monday's trading. The sell-off of shareholders brought down their value by 6.5%, giving the company with a title as the leader of the fall in the US market. However, it should also be admitted that all US securities were sold off.
Shares in electric car manufacturer, Tesla, have surged more than 8 times since this year began. Its price started rising very quickly as soon as news about the imminent inclusion of the company's securities in the S&P 500 broad market index appeared. Therefore, it is completely likely that this kind of decline in stocks on Monday is just a correction of the indicators of the recent rise. Although it should be admitted that the general negative in the global markets, worsened by the news of a new strain of coronavirus, also contributed to this.
It should be noted that Tesla did not immediately manage to get into the S&P 500 stock index. The S&P Dow Jones indices did not include the automaker in the September index this year, although analysts predicted that this should happen. The reasons for the committee's refusal were never made public. Nevertheless, Tesla still made it to the index, but on the second attempt.
According to derivative financial indicators, Tesla shares were quite overvalued yesterday. So, the P/E ratio is 1118.22 x, and this is a very high value, especially if you consider that its average indicator for the market is at the level of 27x. This is due to the fact that the company's quotes soared almost nine times in 2020 alone. Some experts believe that the history of Tesla shares over the past year is nothing more than a classic bubble.
In any case, Elon Musk warned his company's employees about the possibility of collapse of Tesla's securities way back early December. According to his statement, the actual profitability of the concern is very low – about 1% for 2019, so investors expect the company's future earnings. If they start to doubt the possibility of getting it, then the stock prices will immediately collapse.
