What happened
Shares of electric car manufacturer Tesla (NASDAQ: TSLA) rose abruptly on Thursday. The stock ended the trading day up 5.3%, trading at nearly $ 656.
The growth of the stock seems to have been caused by a combination of a full bullish day in the stock market and S&P Global‘s (NYSE: SPGI) move to increase its credit rating on the manufacturer’s debt.
Image source: The Motley Fool.
so what
Ahead of S&P Globalwe will move next week to bring Tesla stock into the S&P 500 for the first time, S&P Global changed the level of Tesla debt to BB-, up from BB-. S&P Global noted that “the company’s rising liquid has significantly reduced their financial risk.”
This news follows Tesla’s recent capital increase. Earlier this month, Tesla entered into an agreement to provide up to $ 5 billion worth of common stock. This strengthened Tesla’s cash position by 34%.
Also helping the stock Thursday was a major market move higher. Showing hope in the market, the S&P 500 rose 0.6% to a high.
Now what
Tesla is expected to add to the S&P 500 before the market opens. While it is possible that this could give the stock a near – term volatility, investors should not count on it.
Most importantly, Tesla is meeting its full-year 500,000 delivery guidelines and continues to provide evidence that this is just the tip of the iceberg for its long-term growth story. time.