Elon Musk is still one of the richest people on the planet, but the stock price of Tesla took a drastic dip Monday, falling 6.3% at one point, before rallying to an end-of-day low of 5.1%.
Breathe easy, Tesla stock owners, shares are up 60% since mid-November and there’s a reason for the decline today. Here’s how Motley Fool described it:
“Just last week shares of Tesla rose to all-time highs as many funds that mimic the S&P 500’s holdings were adding the automaker’s shares to their funds. In November, S&P Global had announced its plan to add Tesla stock to its index on Monday morning.
“Since the S&P 500 is a market-cap weighted index, Tesla is the fifth-largest holding in the index. Since investors have known the stock would be included in the index since mid-November, lots of them, along with fund managers, were likely buying up the stock ahead of its inclusion. However, demand for the stock may have gotten ahead of itself in recent weeks, leading to a sell-off in the stock after its official inclusion Monday.”
Time will tell what sort of long-term impact the inclusion of Tesla in the S&P 500 will have on the stock price, but it’s going to be a Merry Christmas for Musk and anyone who’s bet on his success and owns Tesla stock.