There Are Two Teslas, Says Jim Cramer

Katherine Ross

Tesla will not be included in the list being added to the S&P 500 index, despite expectations that four consecutive quarters of positive earnings would make it a shoo-in.

The S&P Dow Jones Indices announced changes to its venerable bellwether index after the closing bell on Friday that did not include the electric car and battery maker. 

S&P Dow Jones Indices rebalances its indexes on a quarterly basis. A company needs to meet certain benchmarks to be considered, including four consecutive quarters of profitability - something Tesla accomplished after its most recent earnings report but still didn't satisfy the S&P committee that makes the calls.

While the electric carmaker reported its fourth quarterly profit in July and its much-hyped “Battery Day” event has also boosted investor optimism, at least some of the wind behind Tesla's tail lights has been the potential for S&P 500 inclusion itself - a move that would automatically force exchange-traded funds and other index-tracking funds to buy Tesla stock, boosting the shares further.

You can follow Jim Cramer and Katherine Ross on Twitter at @JimCramer and @byKatherineRoss. Read more from Katherine Ross here.

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Comments (2)
No. 1-2

Tesla should be included in the S&P 500, that's crazy that it isn't