Investor's Corner
Tesla’s (TSLA) massive valuation could make S&P 500 inclusion complicated
Tesla (NASDAQ: TSLA) is set to join the S&P 500 on December 21st, making it one of the newest members of the world’s most influential stock index. However, Tesla’s gigantic market capitalization, which has made it the most valuable car company globally, could make the inclusion process slightly more complicated than initially planned.
Tesla’s over $423 billion market cap will make it the largest company ever to be added to the S&P 500 Index. Putting the entire company into the new benchmark would force index-tracking funds to sell upwards of $40 billion in stock to make room for the electric car company. Because of this, the S&P’s overseer and consultant, the S&P Dow Jones Indices, is considering the option of adding Tesla to the index in phases or tranches.
After being snubbed from the index in early September, Tesla is finally getting its shot to join the S&P. But while the company is experiencing an over 400% growth in share price so far this year, adding Tesla in more than one phase seems to be the more favorable scenario. However, the S&P Dow Jones Indices will seek out feedback from investors, questioning them on which strategy is more appealing to them: adding TSLA all at once or in several chunks. It is unknown which companies will be replaced by Tesla, but the S&P plans to name them later.
Howard Silverblatt, a Senior Index Analyst at S&P Dow Jones, stated that the decision to add the electric automaker wasn’t a simple one, especially considering the magnitude of Tesla’s inclusion. “It wasn’t easy to make such an important decision, and this decision has a big impact,” he said. Silverblatt added that getting insight from investors will assist in the decision-making process.
“An open-ended dialog with investors will only help. You can’t put a company in at such a high level just like you would any other firm. The times have changed, the magnitude of the stocks that are being added has changed, too,” he added.
Tesla will end up likely being one of the top 10 largest stocks in the S&P when it joins the index on December 21st, Bloomberg reported. Estimating that it will fall in between Johnson & Johnson and Procter & Gamble Co., Tesla’s valuation would be the equivalent of the 60 smallest stocks in the benchmark. However, S&P Dow Jones uses a float-adjusted market-cap to determine the weight instead of the straight figure.
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When the S&P 500 is reshuffled, which happens on a quarterly basis to rebalance the index, changes occur due to fluctuations in a company’s size. Depending on growth or a reduction of size, some stocks may move from the S&P’s small-cap index to the large-cap, or vice versa.
In Tesla’s circumstance, no company that will be removed is large enough to offset the automaker’s inclusion into the S&P 500. This is why the index’s overseer is considering adding the company in more than one tranche.
Lawrence Creatura, a portfolio manager at PRSPCTV Capital LLC, told Bloomberg that this is effectively “trading a pawn on the chessboard for a queen.”
“The size of Tesla as it’s being included in the index is much larger relative to the company that is likely to come out. That’s going to create a lot of shuffling among passive funds that track the S&P 500 explicitly,” Creatura also said.
On the news that TSLA would join the S&P on Monday evening, shares of the automaker’s stock spiked over 13% in after-hours trading. At the time of writing, TSLA shares were trading at $444.10, up over 9%.
After finally attaining the four consecutive profitable quarter threshold required to join the index, Tesla is riding a strong stream of momentum heading into the end of 2020. In its most successful year as a company yet, Tesla plans to close out 2020 with a bang by accomplishing its 500,000 vehicle delivery mark, which was set at the beginning of the year before the COVID-19 pandemic began. With increased production and growing demand, Tesla could reach a one million car a year production and delivery rate, surging the popularity and adoption of electric cars and phasing out the use of petrol-powered engines.
Disclaimer: Joey Klender is a TSLA Shareholder.
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SpaceX stock did the opposite of what most of Wall Street expected this week, when the day designed to be its most dangerous turned into a rally, and the rally kept going.
Thursday marked the first major lockup expiration since SpaceX’s June IPO, making roughly 911.5 million insider held shares eligible to trade for the first time, more than doubling the company’s public float. Analysts and short sellers had spent weeks bracing for a flood of selling, especially after the stock fell 13 percent following its first earnings report as a public company on Tuesday. Instead, shares rose 6.1 percent Thursday to close at $114.92, and by Friday they were trading near $129, up more than another 12 percent on the day.
SpaceX shorts get warned by Musk ally, echoing Tesla’s early struggles
The setup made the outcome notable. Short interest had climbed to roughly 34 percent of the float heading into earnings, among the highest of any large cap stock, with about 95 percent of available shares to borrow already on loan. CEO Elon Musk warned short sellers twice in the weeks before the lockup, writing on X that “the survival probability of firms who maintain a significant short position in SpaceX over time is very low,” then following up on the morning of earnings with “I try to warn them, but they just double down.”
When the newly unlocked shares hit the market and the selloff never showed up, some of that short position appears to have started unwinding. TipRanks reported that options activity shifted toward bullish strategies like put selling and risk reversals following the rally, with roughly $600 million in options premium trading Thursday alone. Retail buyers also stepped in during the earnings dip, according to Vanda Research.
The fundamentals behind the stock have not changed much in a week. SpaceX’s revenue nearly doubled year over year to $7.8 billion, with Starlink subscribers doubling to 12 million and the company’s AI segment growing 247 percent. What spooked investors on Tuesday was the spending side. Capital expenditures jumped to more than $18 billion for the quarter, up from $2.8 billion a year earlier, with AI investment alone rising from $749 million to $15.8 billion. Wall Street remains split on whether that spending is building infrastructure SpaceX needs or outrunning what the business can currently support, a debate Teslarati has tracked since shares first came under pressure.
None of that resolves the bigger question hanging over the stock. Thursday’s release was only the first of nine staggered lockup tranches, with roughly $800 billion worth of additional shares scheduled to become eligible through October, and Musk’s own stake stays locked until next June. If this week is any indication, the market is treating that supply as something it can absorb rather than something to fear, at least for now.
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Cybertruck
Tesla Cybertruck production snaps back after ugly supplier fight
Cybertrucks are piling up again at Giga Texas after Tesla’s court win against a parts supplier.
Cybertruck production at Giga Texas is showing its first visible recovery since Tesla sued a supplier last month over withheld manufacturing tooling.
Aerial observer Joe Tegtmeyer flew over the Austin factory Wednesday morning and counted roughly 100 or more Cybertrucks filling the outbound lot, a sharp jump from the thin numbers seen in recent weeks. The flyover came a day after a judge granted Tesla a temporary restraining order against Angstrom Automotive Group, the parts supplier at the center of the dispute.
Tesla filed an emergency lawsuit in late July after Angstrom told the automaker it planned to close the Troy, Texas facility where Tesla’s die-cast tools, trim dies and other Cybertruck stamping equipment were housed. According to Tesla’s complaint, a shipment of 700 finished parts never left the building, and when Tesla sent representatives to retrieve its equipment, accompanied by law enforcement, they were turned away. Angstrom allegedly then asked for an extra $250,000 a week to keep operating, which Tesla’s filing described as holding its own property for ransom.
TESLA: U.S. District Judge Christopher R. Wolfe of the U.S. District Court for the Western District of Texas, Waco Division granted Tesla a Temporary Restraining Order and Writ of Replevin in its dispute with Angstrom Automotive (Case No. 6:26-cv-00477).
The order authorizes… https://t.co/E1DKcQSxMn pic.twitter.com/LR8aAiV2Og
— S.E. Robinson, Jr. (@SERobinsonJr) August 5, 2026
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The restraining order gives Tesla immediate right of entry to Angstrom’s facility to recover the tooling. It is temporary, with a fuller hearing still to come, but the speed of Wednesday’s rebound suggests the Angstrom shortage was indeed the main bottleneck limiting Cybertruck output. Outbound lot counts are an imperfect measure of actual production, since finished trucks can sit for days before shipping, but a lot that full after a lean stretch is a meaningful signal.
Cybertruck output at Giga Texas has fluctuated all year as Tesla worked through supply issues and introduced new trims, including a cheaper Dual Motor AWD version that drew strong early demand.
Venture capitalist Chamath Palihapitiya has cautioned investors shorting SpaceX shares, drawing a direct parallel to the intense short-selling pressure Tesla faced in its early public years.
Responding to reports of elevated short interest in the newly public rocket, satellite, and AI company, Palihapitiya noted that similar dynamics played out with Tesla, where aggressive short sellers ultimately “went broke.”
SpaceX (NASDAQ: SPCX) went public on June 12, 2026, in the largest IPO on record, pricing at $135 per share. Shares quickly surged to an all-time high of $225.64 just days later, briefly implying a valuation exceeding $2 trillion. The stock has since retreated sharply amid valuation concerns, lockup expiration fears, and broader market dynamics.
By early August, it traded near $108–$125, representing a roughly 50 percent decline from the peak and bringing the market capitalization closer to the $1.5–1.7 trillion range. On August 4, shares closed up more than 9 percent at $125.33 ahead of earnings before facing pressure in after-hours and premarket trading.
Short interest has climbed dramatically. According to S3 Partners data widely cited in market reports, short positions reached approximately 219.3 million shares by late July, about 34 percent of the limited public float of roughly 640 million shares, and represented a notional value of around $24.6 billion.
Utilization of shares available to borrow hit 95 percent, with borrow fees rising. This level of shorting exceeded the dollar value of short bets against Tesla at the time and built rapidly ahead of two catalysts: the company’s first post-IPO earnings and an August 6 lockup expiration that could free up to 911.5 million additional shares.
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CEO Elon Musk has issued warnings of his own. In mid-July, as short interest approached one-third of the float, he posted that “the survival probability of firms who maintain a significant short position in SpaceX over time is very low,” reiterating his view that the company could ultimately be worth more than Earth if it achieves its goals.
On August 4, just before earnings, Musk responded to the latest short-interest data by saying, “I try to warn them, but they just double down.”
SpaceX delivered its first quarterly results as a public company after the close on August 4. Second-quarter revenue rose 92 percent year-over-year to $7.8 billion, beating consensus estimates near $6.8–6.9 billion.
The net loss narrowed to $541 million, or 9 cents per share, better than the roughly 23–24 cent loss expected. Starlink/connectivity contributed about $4.3 billion (up 66 percent), while the AI business generated $2.6 billion (up roughly 250 percent). Capital expenditures were heavy at $18.4 billion, largely tied to AI infrastructure. Management projected a $100 billion annualized revenue run rate by year-end 2026 and outlined a path toward $1 trillion in annual revenue by 2030.
The combination of Chamath’s historical reminder, Musk’s repeated alerts, and the company’s ambitious growth targets underscores the high-stakes debate surrounding SPCX. Short sellers are positioned for near-term supply pressure from the lockup, while long-term bulls point to Starlink scale, Starship progress, and AI compute expansion as reasons the bears may ultimately face the same fate as many early Tesla skeptics.
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