Elon Musk Splits Stock, Makes Tesla's Case to Join Dow Jones
Like it or hate it, Tesla (NASDAQ: TSLA) has indisputably been one of the biggest success stories of the past decade. Since going public in 2010, Tesla's stock has soared, and the electric vehicle manufacturer has defied industry naysayers by ramping up production and becoming the most valuable automaker on earth.
Along with its stock price rise, Tesla has demonstrated its ability to perform financially and fundamentally. By becoming consistently profitable, Tesla is likely to join the S&P 500 Index (SNPINDEX: ^GSPC) in the near future. Yet by making a highly unexpected move on Aug. 11, CEO Elon Musk brought out his usual flair for the dramatic -- and made his case for why Tesla should join the Dow Jones Industrial Average (DJINDICES: ^DJI).
Until Tuesday, there was one seemingly insurmountable obstacle that would have made Tesla getting into the Dow Jones Industrials impossible. Its stock price of nearly $1,400 per share as of the Aug. 11 close would've made it an impractical choice to join the price-weighted average, because its influence over the entire Dow Jones Industrials would've been unjustifiably high. Even now, the fact that Apple has a nearly 11% weighting in the Dow is somewhat controversial, and that's with Apple's share price of just $450. The idea of having Tesla represent 30% was a complete nonstarter.
Source Fool.com