Elon Musk’s Tesla to Enter S&P 500 after Reporting a 4-Straight Quarter of Profit!

Tesla Inc on Wednesday reported a 2Q20 profit as cost cuts and strong deliveries helped offset coronavirus impact on factory closures, bringing its stock to rise by 4.4% in after-hours trading and clearing a hurdle that could lead to the electric carmaker’s inclusion in the S&P 500 index, according to Reuters.

 

The net income from the second quarter was $104 million, or $0.50/share, the first time of  a 4-straight quarter of profit, a condition for Tesla to be considered for the stock index of the largest U.S. companies. 

 

Tesla shares have gained more than 500% over the past year. Many analysts believe the rally has been fueled in part by expectations of Tesla’s imminent inclusion in the stock index, which would unleash a flood of demand for shares, said in Reuters report.

 

Chief Executive Elon Musk said on a conference call on Wednesday that Tesla would prioritize growth over profit going forward and focus on making its vehicles more affordable.

 

“The thing that bugs me most right now is that our cars are not affordable enough, we need to fix that,” Musk said on the call. “I think we just want to be like slightly profitable and maximize growth and make the cars as affordable as possible.”

 

Tesla also stated that its goal is to deliver at least half a million vehicles by the end of 2020 despite production interruptions. “While achieving this goal has become more difficult, delivering half a million vehicles in 2020 remains our target,” the company said.