On Monday, Tesla Will Join The SP500: Here's What Happens Next On Monday, Tesla Will Join The SP500: Here's What Happens Next Tyler Durden Thu, 12|17|2020 - 20:20 One of the most anticipated and material changes to the SP500 is set to take place in just hours, when Tesla - a $615 billion company that has barely generated any GAAP profits in its operating history - is set to join the world's most important market index. What happens then? Well, as with every other thing in the market, there are two schools of thought. According to one, which Bloomberg affectionately calls the Wall Street smart beta data nerds - Tesla will be a drag on the index. These "smart beta" quants believe that market-weighted indexes suffer by chaining their fortunes to big and bloated companies. As such, Tesla’s imminent entry into the SP 500 is stirring their passions by framing the debate in particularly stark terms. According to Bloomberg, index pioneers such as Rob Arnott are making the rounds and publishing studies in the run-up, "trumpeting data that purports to show that megacap companies have the potential to harm passive returns." Their pessimistic view coincides with that of the smart-beta folks who say many stock indexes stumble when the massive companies that dominate them run out of room to grow.