NEW YORK – Apartment Investment and Management will be removed from the S&P 500 by Dec. 21 to create room for the inclusion of Tesla, S&P Dow Jones Indices said on Friday.
Apartment Investment and Management, which is spinning off Apartment Income REIT in a deal likely to be completed post market close on Monday, won't be associated with the S&P Composite 1500 indices market cap ranges, S&P Dow Jones Indices said in a statement.
The company includes a market value of approximately $6 billion and it is stock is down 21% this year. By contrast, Tesla's stock market value stands at around $600 billion, and it is shares are up 600% year-to-date.
\”The subtraction of the relatively small REIT does not have a substantial impact on the index at all, but the inclusion of Tesla does have a big effect,\” said Tim Ghriskey, chief investment strategist at Inverness Counsel in Ny.
Adding Elon Musk's Tesla to Wall Street's most followed benchmark will force index funds to purchase over $70 billion worth of its shares, while simultaneously selling shares of other S&P 500 constituents.
The electric car maker's stock has surged nearly 50% since Nov. 16, when it was announced Tesla would join the index.
\”Definitely, traders have been accumulating the stock significantly awaiting the indexes needing to buy around the first day's trading,\” Ghriskey said.
Tesla will take into account just over 1% of the S&P 500.
California-based Tesla's meteoric rise makes it by far the most valuable auto company on the planet, despite production that is a fraction of rivals for example Toyota, Volkswagen and Vehicle.
Apartment Investment and Management Co's shares, which closed down 0.5% at $40.58 on Friday, slipped to $39.00 in extended trading. Tesla shares, which closed down 2.7% at $609.99, was little changed after the close.
