Shares in the electric car maker led by CEO Elon Musk rose almost 3% on Wednesday and have now surged 40% since Nov. 16, when it was announced Tesla would join the S&P 500 in December. Investors rushed to buy shares ahead of index funds that will be forced to acquire over $50 billion of its shares.
One of Wall Street’s most loved – and hated – stocks, Tesla was already the U.S. stock market’s most traded companies by average daily value, but trading has surged in recent sessions, along with Tesla’s stock price.
“It’s been crazy. Since Tesla’s (announced) inclusion in the S&P, you’ve had a lot of managers out there that didn’t own enough of it having to buy more,” said Sahak Manuelian, managing director of trading at Wedbush Securities, in Los Angeles.
Retail investors using apps like Robinhood are also responsible for much of the recent volume spike, Manuelian added.