Tesla shares up 12 percent as automaker zooms to join S&P 500

Based on Monday's value, it will be in the top ten of most valuable company's in the index.

The decision to add the California-based automaker in the broad-based market index was announced on November 16, prompting another wave of affection for Tesla stock.

Shares surged 11.5 per cent to US$455.00 in after-hours trading. Based on its market value Monday, Nov. 16, 2020, the electric auto maker would be one of the top 10 companies in the benchmark index upon entry. Tesla has reported $451 million in profits through the first nine months of 2020.

The billionaire tested positive for Covid-19, his rocket company launched four astronauts into space and on Monday his electric carmaker Tesla Inc. was named for inclusion in the S&P 500.

Because of Tesla's large market capitalization, S&P Dow Jones Indices is considering splitting the addition of the company's stock into two "tranches".

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Tesla stock has increased fivefold in 2020 on the strength of numerous developments: from introducing the Model Y, the crossover variant of the Model 3 that became the world's most successful electric vehicle, to gigafactories opening, under construction or announced on three continents, and to bouncing back from the Covid-19 pandemic to post a record third quarter including a net income of $US809 million ($A1.1 billion).

S&P Global did not say which firm Tesla would replace, saying that it would make mention of in a separate release.

Elon Musk's wealth leapt by $15 billion after Tesla nabbed a spot in the S&P 500 index on Monday.

"Tesla will be one of the largest weight additions to the S&P 500 in the last decade, and consequently will generate one of the largest funding trades in S&P 500 history", S&P DJI said in a statement.