Tesla achieved a milestone on Monday: The company’s stock debuted on the S&P 500 Index after the electric carmaker scored four consecutive quarters of profitability. Tesla’s debut came as global stock markets retreated from rallies on news of a potentially more contagious strain of the that causes COVID-19, Reuters reported.
Tesla’s slump actually helped drag the S&P 500 down just over 1% during morning trading. A single share of the electric carmaker trades for around $658 at the time of this writing, down 5% from record highs following the company’s stock split earlier this year. According to Reuters, Tesla accounts for 1.69% of the S&P 500’s weight as of today.
For a company to enter exclusive the stock index, which is meant to serve as an indicator for the US stock market and the country’s economy in a broader sense, the firm must have high liquidity, have at least 10% of its shares outstanding for the public and string together four quarters of consecutive profitability. A company must also reach a market capitalization of $8.2 billion. That part’s been easy for Tesla as investors continue to buy into future, widespread success for the carmaker. Today, Tesla’s market capitalization hovers around $630 billion. Critics continue to say the automaker is wildly overvalued, however.
Most of Tesla’s profits come from selling regulatory credits, and even CEO Elon Musk called on the company to , warning that Tesla could tumble quickly without a focus on actual profitability.