Tesla Slides on First Day of Trading on S&P 500 Index

A Tesla charging station is seen in the U.K. on Dec. 15. (Chris Ratcliffe/Bloomberg News)
A Tesla charging station is seen in the U.K. on Dec. 15. (Chris Ratcliffe/Bloomberg News)

[Ensure you have all the info you need in these unprecedented times. Subscribe now.]

Tesla Inc. was among the biggest drags on the S&P 500 in its first day of trading on the benchmark.

The electric-vehicle maker, which is now ranked as one of the heaviest-weighted stocks and represents 1.6% of the index, fell as much as 6.3% as it retracted gains from Dec. 18 when tens of millions of shares were purchased by index-fund managers. The S&P 500 fell as much as 1.9%.

Institutional buying of Tesla surged late Dec. 18 as index-tracking managers rushed to add the shares to their funds. Almost $60 billion worth of stock changed hands at $695 a share, most of it in one giant trade in the session’s waning seconds. The price was about 5% higher than Tesla’s level just prior to the close. More than $150 billion worth of Tesla shares traded on Dec. 18, ahead of the index inclusion.


See more transportation stock listings

Other electric vehicle companies, whose shares have gained significantly over the past month after the S&P 500 inclusion was announced, were also weak on Dec. 21. Some of the biggest declines came from Nikola Corp., Electrameccanica Vehicles Corp. and Workhorse Group Inc.

Tesla has catapulted 731% this year in anticipation of the historic inclusion, making it the biggest company ever to be added to the benchmark. The EV pioneer also joined the S&P 100, replacing oil and gas firm Occidental Petroleum Corp.

“There is strong precedence for positive returns for stocks prior to S&P 500 inclusion and post announcement, but very limited precedent for near term out performance post inclusion,” Sanford C. Bernstein analyst Toni Sacconaghi wrote in a note earlier this month.

Want more news? Listen to today's daily briefing: