- It was announced that Tesla will be added to the S&P 500 index of the largest publicly-traded American companies.
- However, history is littered with instances of fast-growing companies added to the index shortly before a major collapse.
- For example, Yahoo was added (December 1999) four months before the tech bubble burst.
- While Tesla’s finances have drastically improved (Q3 2020 cash inflow of $2.4 billion), its $400 billion valuation is hard to justify given $556 million in net income over the last 12 months.
