With Tesla on the verge of being listed, are you changing your position?
So many index funds are going to have to buy, are their enough profit takers to sell , or will there be another run up on share price?
Everyone’s trading and aware of Tesla. Being added to an index won’t have any affect on its share price. It’s still way too volatile for me to trust in a swing trade much less anything longer term.
It is interesting that you think the share price will not change. At 277 billion, it would be one of the largest companies added. All the index fund managers will have buy shares. A huge change in demand will not affect its stock price?
You are only talking about the S&P 500 index. It’s already included in many other index funds.
Also, shouldn’t it’s inevitable listing already be valued into the stock price? It’s pretty well-known information and I see no reason to believe investors haven’t priced that information in.
The problem is ,Tesla is so big, it will be 1 percent of the index. A lot of trading will have to take place for all the S&P 500 index funds to buy enough shares to obtain an index matching position.
Nah. That’s not how it works. I’ve watched this kind of thing before most notably when former employer of mine was added when I worked there. The big houses already have plenty of Tesla stock that they can shuffle in.
Do the index funds have to sell other shares to get the money to give to the shifting company?
Still learning about the icons, did not mean to remove my post, can it be undone?
reported post to moderators.
No problem, and thank you kayaker.
I freely admit I don’t follow the indices composition much, often they don’t have to sell anything because they’re a merger or something that caused the number to go down.
But yes, you’d expect selling of a booted company and buying of an added company, at least by SPY since they hold the actual underlying shares. Other index funds may replicate the index in other ways by not holding all 500 companies, but by using futures or derivatives.
Again, I wouldn’t use being added to the S&P as a reason to make a decision to buy or trade TSLA.
Their price to earning ratio is crazy high. I agree it is not a buy stock.
Thanks for the assist.
$408 a share on Monday and $498 today.
$585 today. WSJ predicts 100 billion in trades from their inclusion in the S&P.
“The index company said Tesla will be added to the broad stock-market gauge before the start of trading Dec. 21, meaning most index-tracking funds that follow the S&P 500 will engage in a flurry of trading the Friday before.”
" More than $100 billion will be put into motion in coming weeks as passive fund managers and some actively traded mutual funds all benchmarked to the S&P 500 adjust their portfolios to make room for it, traders and fund managers say."
Remind me not to go to you for stock tips! 
More seriously, this just shows that you can’t really predict these things unless you have specialized knowledge that the market-makers don’t have. I readily admit I don’t have that knowledge, so I just own the market, perhaps weighted to segments or factors that interest me (value/growth, large/mid/small).
By any conventional measure, the stock is way overvalued.
I suspect now we will realize just how overvalued it is.
I should have said buy and hold. Buy and dump, sure.