Factbox-Wall Street braces for Tesla's S&P 500 debut

Tesla will be the most valuable company ever to join the S&P 500 when it makes its debut in Wall Street`s most followed benchmark starting on Monday.

Index funds tracking the S&P 500 will have to buy over $80 billion worth of Tesla shares by Friday`s close, while simultaneously selling other S&P 500 constituents` shares worth the same amount, according to S&P Dow Jones Indices. Source: Reuters

Elon Musk led Tesla will be the most valuable company ever to join the S&P 500 when it makes its debut in Wall Street`s most followed benchmark starting on Monday.

Below are some key facts about Tesla and its upcoming entry into the index:

** Index funds tracking the S&P 500 will have to buy over $80 billion worth of Tesla shares by Friday`s close, while simultaneously selling other S&P 500 constituents` shares worth the same amount, according to S&P Dow Jones Indices.

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** At over $600 billion, Tesla is Wall Street`s sixth largest company by market capitalization. However, its weight within the S&P 500 will be slightly diminished because about a fifth of Tesla`s shares are closely held by CEO Elon Musk and other insiders, and the S&P 500 is weighted based on the amount of its constituents` shares that trade on the stock market.

** Tesla`s stock has surged almost 700% year to date, making it the most valuable auto company in the world, despite production that is a fraction of rivals including Toyota Motor, Volkswagen and General Motors.

** Tesla is easily the most traded stock on Wall Street, with $18 billion worth of its shares exchanged on average in each session over the past 12 months, beating Apple, in second place with average daily trades of $14 billion, according to Refinitiv.

** After a blowout second-quarter report cleared a major hurdle for Tesla`s entry into the S&P 500, analysts now expect the company to end 2020 with net income of $1.1 billion. By comparison, analysts on average expect General Motors to report $6.0 billion in annual net income.

** Bulls view Musk as a visionary entrepreneur central to Tesla`s future. Bears focus on Musk`s track record of missed production targets and on corporate governance risk after Musk was forced to step down as chairman to settle fraud charges in 2018.

** The stock is now trading at over 170 times the average analyst estimate for Tesla`s adjusted net income over the next 12 months, among the highest valuations on Wall Street.

** 35 analysts cover Tesla, on average rating it "hold". Their median price target is $424.50, which is 35% below Tesla`s price of $655.90 on Thursday.

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