Tesla inducted into S&P 500
The electric vehicle maker Tesla was inducted into the S&P 500 on Monday, and immediately slumped by almost 5% within half an hour of the market opening as the news of a new coronavirus strain emanating from the UK started making rounds. This news has dampened the market mood and continues to weigh down the markets worldwide. Tesla was overlooked for inclusion into the S&P 500. earlier in the year.
The Tesla price rollercoaster
Tesla shares have rocketed by almost 80% since the beginning of November, and by more than 700% since the beginning of the year. Tesla has been responsible for more than doubling the wealth of several investors during the year.
However, it has not been all smooth sailing for the Tesla shareholders. They had to contend with controversial tweets from Tesla CEO, Elon Musk.
This single tweet had caused the stock price to plummet by more than 10% in a single day. However, the stock had regained the losses within 6 trading sessions. The shares had also fallen by more than 15% in early September when the news hit that the company had failed to secure an S&P spot.
Elon Musk’s crypto inquiry
Tesla’s flamboyant CEO, Elon Musk in a series of tweets, inquired Michael Saylor, an eminent evangelist of cryptocurrencies, regarding converting “large transactions” on Tesla’s balance sheet into bitcoin. Bitcoin had recently crossed the hallowed $20,000 mark and has continued its upward journey.
Is Tesla overvalued or not?
Though Tesla is a good company, too much value may have been placed on its future growth and prospects rather than on where it is currently. Concentrating too much stock in one stock may be bad for your financial health, though the Tesla rally may suggest otherwise. It is prudent to remember that Rome was not built in a day. Diversification is the name of the game and only invest in companies that you wholly understand.