NEW YORK –  Tesla Inc. is ready to hitch the S&P 500 in December, a serious win for CEO Elon Musk and his shareholders, triggering a large $51 billion commerce as index funds are compelled to purchase the EV producer’s shares.

Shares of Tesla surged 12 p.c on Monday in prolonged commerce after S&P Dow Jones Indices introduced that the corporate would be part of the S&P 500 index previous to the opening of buying and selling on Dec. 21.

“(Tesla) will probably be one of many largest weight additions to the S&P 500 within the final decade, and consequently will generate one of many largest funding trades in S&P 500 historical past,” S&P Dow Jones Indices stated.

With a market capitalization over $380 billion, Tesla is likely one of the most precious firms on Wall Avenue.

Tesla’s inclusion within the broadly adopted inventory market index means funding funds listed to the S&P 500 should promote about $51 billion value of shares of firms already within the S&P 500 and use that cash to purchase shares of Tesla, in order that their portfolios appropriately mirror the index, in line with S&P Dow Jones Indices. Tesla will account for about 1 p.c of the index.

In a separate press launch, S&P Dow Jones Indices requested traders for suggestions on whether or not to incorporate Tesla unexpectedly on Dec. 21, or in two installments, with the primary added every week earlier, as a consequence of Tesla’s unusually giant market capitalization.

A blockbuster quarterly report in July cleared a serious hurdle for Tesla’s potential inclusion.