S&P’s decision to add Tesla in one shot demonstrates the power of passive investing


CEO of Tesla Motors Elon Musk reacts following the company’s initial public offering at the NASDAQ market in New York June 29, 2010

Brendan McDermid | Reuters

S&P’s action on Tesla showed the growing power of indexers and passive investing.

S&P Dow Jones Indices has announced that Tesla will be added to the S&P 500 using the closing price on Dec. 18 in one single action.

S&P has been canvassing big institutional investors to try to figure out whether Tesla should be added in one fell swoop — on the close on Friday the 18th, which is a quadruple witch and the traditional day stocks are rebalanced in the S&P — or whether it should be split up into several separate trading days.

The concern:…


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