Shares of Tesla TSLA.O surged 10% to end near a record high on Wednesday, extending a two day rally after it was announced the electric car maker will join the S&P 500.
The California company’s stock has jumped nearly 20% since S&P Dow Jones Indices announced late on Monday it would add Tesla to Wall Street’s most watched benchmark as of Dec. 21, a change that will force index funds to buy around $50 billion of its stock.
A blockbuster quarterly report in July cleared a major hurdle for Tesla’s potential inclusion in the S&P 500, leading to speculation that the company, now with a market capitalization over $450 billion, might be added to the index and spark a surge in demand for its shares.
Up about 500% in 2020, Tesla has become the most valuable auto company in the world, by far, despite production that is a fraction of rivals such as Toyota Motor 7203.T, Volkswagen VOWG_p.DE and General Motors GM.N.
Its stock tumbled 21% in one session on Sept. 8 after it was left out of a group companies being added to the S&P 500, underscoring how much many traders expected it to be added.