The S&P Dow Jones Indices announced changes to the S&P 500 index, effective at the open of trading Sept. 21. The addition list did not include Tesla (TSLA) - Get Report, which was in the running to join the elite index.
The S&P 500 index adds Etsy (ETSY) - Get Report, equipment manufacturer Teradyne (TER) - Get Report, and pharmaceutical firm Catalent (CTLT) - Get Report. All three names had been previously included in the S&P MidCap 400.
S&P Dow Jones Indices rebalances the index on a quarterly basis, adding new names and kicking others out.
To be considered for the index, a company needs to meet certain benchmarks, including four consecutive quarters of profitability, but inclusion is ultimately up to the discretion of the S&P committee.
After Tesla's last earnings report, in which it reported its fourth straight quarter of positive earnings, the carmaker became eligible for the index.
Tesla shares plunged 7% in after hours trading on Friday after it was excluded from the rebalancing announcement.
Tesla's stock has seen an incredible run-up year to date, with its valuation swelling to $390 billion as of Friday.
The company recently enacted a 5-to-1 split of its stock, effective on Monday of this week. Tesla shares closed at $418.32 on Friday.
On Wednesday, an SEC filing showed that Baillie Gifford, the largest outside shareholder in Tesla, cut its stake in the carmaker to less than 5% of Tesla, down from 6.32%, according to data from FactSet.