Tesla sheds US$80bn after S&P snub fuels rush of selling

Tesla Inc (NADAQ: TLSA) the electric vehicle headed by Elon Musk, shed more than a fifth of its value overnight as it was surprisingly left out from joining the S&P 500 in the index’s latest update. Shares tumbled by 21% on the news, which equated to around US$80bn a sum that analysts were quick to point out is more than the current value of Ford and General Motors combined. In was the worst daily performance for shares in the electric car pioneer in what has already been a rollercoaster ride and followed a widespread assumption it would be included. Tesla had cleared one of the main hurdles for inclusion in the S&P 500 in July when it posted its fourth consecutive profitable quarter. Over the past twelve months, the value of the company has risen five-fold as sales have picked up and analysts suggested that Tesla’s sheer size might have weighed against it, as even after the fall last night it is still worth US$307bn. Becoming a member of the S&P 500 would have required trackers and other funds to acquire shares to match their benchmark positions. Funds buying ahead of the expected inclusions unwinding their holding contributed to the fall last night, analysts said. The carmaker even carried out a stock split to make the shares more marketable to retail investors. Instead,  online retailer Etsy, semiconductor group Teradyne and pharmatech Catalent were added to the index. Shares in Tesla closed down US$88.11 at US$330.21.