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(Reuters) – Shares of Tesla (NASDAQ:TSLA) Inc surged 9% in extended trade on Monday after S&P Dow Jones Indices announced that the electric carmaker would join the S&P 500 index, a major win for Chief Executive Elon Musk and his shareholders.
Tesla will join the S&P 500 prior to the opening of trading on Dec. 21, S&P Dow Jones Indices said in a news release.
Due to Tesla’s unusually large market capitalization, S&P Dow Jones Indices said it would consult investors about whether the company should be added all at once or in two separate tranches.
With a market capitalization over $380 billion, Tesla is one of the most valuable companies on Wall Street.
Tesla’s inclusion in the widely followed stock market index means investment funds that track the S&P 500 will have to buy billions of dollars worth of the company’s shares.
A blockbuster quarterly report in July cleared a major hurdle for Tesla’s potential inclusion.
