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It does, but the rebalancing occurs in September I think.

by knrz 6y ago

hrpnk 6y ago
A company can issue new shares for the index funds instead of requiring those to buy the shares on the market. Otherwise, with the low free float, such demand would move the price higher.
- jcheng 6y ago
  Is there a reason the company would want to do that? Why wouldn't they just let the price move higher?
  - mrep 6y ago
    To raise capital and fuel their growth. They raised 2 billion earlier this year at a price of 767 (1650 now) to fuel their growth because they thought there share price was high then. It seems like a perfect time to announce another massive capital raise to fuel their growth now that their share price is double what it was back then and this page [0] lists 1 trillion dollars worth of sp500 index funds and I know vanguard sp500 etf (voo) which isn't in that list has another 250 billion. sp500 is about 27 trillion so that list alone represents about 4.6% of the market. TSLA joining the sp500 means those index funds alone will have to buy about 4.6% of TSLA to rebalance so this to me looks like an amazing opportunity to raise a ton of cash to fuel cybertruck/semi/roadster growth. 4.6% of TSLA 300 billion market cap could fuel a 13.8 billion dollar capital raise which could be announced after sp500 inclusion as a quick way to get those funds to the proper weighting. At least that is my idea. During the call, they said they have 8 billion in cash so they don't need to raise any more capital. But then again, elon also said that right before their 2 billion dollar raise earlier this year so... [0]: https://www.investopedia.com/articles/markets/101415/4-best-sp-500-index-funds.asp https://www.investopedia.com/articles/markets/101415/4-best-...
easde 6y ago
The quarterly rebalancing of the S&P 500 is only relevant when companies already in the index change their free float (usually by issuing / buying back shares). New companies can be added at any time (with a few days advance notice).

It does, but the rebalancing occurs in September I think.

by knrz 6y ago

It does, but the rebalancing occurs in September I think.

A company can issue new shares for the index funds instead of requiring those to buy the shares on the market. Otherwise, with the low free float, such demand would move the price higher.

jcheng 6y ago
Is there a reason the company would want to do that? Why wouldn't they just let the price move higher?
- mrep 6y ago
  To raise capital and fuel their growth. They raised 2 billion earlier this year at a price of 767 (1650 now) to fuel their growth because they thought there share price was high then. It seems like a perfect time to announce another massive capital raise to fuel their growth now that their share price is double what it was back then and this page [0] lists 1 trillion dollars worth of sp500 index funds and I know vanguard sp500 etf (voo) which isn't in that list has another 250 billion. sp500 is about 27 trillion so that list alone represents about 4.6% of the market. TSLA joining the sp500 means those index funds alone will have to buy about 4.6% of TSLA to rebalance so this to me looks like an amazing opportunity to raise a ton of cash to fuel cybertruck/semi/roadster growth. 4.6% of TSLA 300 billion market cap could fuel a 13.8 billion dollar capital raise which could be announced after sp500 inclusion as a quick way to get those funds to the proper weighting. At least that is my idea. During the call, they said they have 8 billion in cash so they don't need to raise any more capital. But then again, elon also said that right before their 2 billion dollar raise earlier this year so... [0]: https://www.investopedia.com/articles/markets/101415/4-best-sp-500-index-funds.asp https://www.investopedia.com/articles/markets/101415/4-best-...

easde 6y ago

The quarterly rebalancing of the S&P 500 is only relevant when companies already in the index change their free float (usually by issuing / buying back shares). New companies can be added at any time (with a few days advance notice).