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Tesla Set to Become a Top 10 Company in the S&P 500

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Tesla Set to Become a Top 10 Company in the S&P 500

Tesla s&p 500

The Briefing

  • With positive earnings in each of the last four quarters, Tesla is now eligible to join the S&P 500. They will be the 8th largest stock and 7th largest company on the benchmark index, with a market cap of $544 billion
  • Tesla’s inclusion in the S&P 500 will commence in December of this year—an additional blow to Tesla bears as the index brings with it an additional layer of prestige

The New Kid On The Block

Tesla will be joining the S&P 500 in December, gaining eligibility for inclusion after posting positive earnings over four consecutive quarters.

In Q3’20, the company made $331 million in profits, and delivered 139,300 vehicles. The stock has been on a tear in recent years, and joining the index only furthers the automaker’s momentum – dealing another blow to the increasingly hopeless short sellers along the way.

CompanyMarket CapTTM Earnings
Apple$1,971B$55B
Microsoft$1,617B$44B
Amazon$1,569B$11B
Alphabet$1,193B$34B
Facebook$785B$18B
Berkshire Hathaway$547B$81B
Tesla$544B$0.5B
Walmart$430B$14B
Visa$411B$10B
Johnson & Johnson$377B$34B

Anything But Standard

Standard & Poor’s have quite the criteria before a company can be considered for inclusion in their flagship index. To be part of the S&P 500, a minimum market cap of $8.2 billion is required.

Of course, market cap is not where Tesla’s weakness is. Valued at $544 billion, right off the bat they will be one of the top S&P 500 companies. Rather, net income has been the struggle for Tesla. After government subsidies, they posted $556 million in trailing twelve month (TTM) profits, placing them 357th in the index.

By market cap, Tesla runs with some of the all-time greats and will be the largest inclusion to join the index ever. When ranked by net income though, a much different ranking emerges:

RankCompanySymbolAnnual Net Income
355Tractor Supply CompanyTSCO$562M
356Mettler-Toledo InternationalMTD$561M
357TeslaTSLA$556M
358Huntington Ingalls IndustriesHII$549M
359Zebra TechnologiesZBRA$544M

By this metric, the automaker can be found adjacent to lesser-known Mettler-Toledo and Tractor Supply Company.

The EV Revolution

As the electric car movement continues full steam ahead, Tesla as the market leader will play a pivotal role in society’s transition towards it. The average cost of the Model 3 is decreasing, thus increasing its affordability. This marks a positive signal as widespread adoption often above all requires feasibility for the masses.

As governments worldwide continue to bolster their arsenal in combating climate change, it catalyzes the demand for both electric vehicles and Tesla shares. With short seller activity beginning to subside, Tesla’s official kickoff in the S&P 500 next month could be the next chapter for Elon Musk & Co.

Where does this data come from?

Source: Asset Dash and Barchart.com.
Notes: Financial data is as of November 25th, 2020

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Datastream

Visualizing Earth’s Global Ice Loss Between 1994-2017

In just over two decades, the planet has seen 28 trillion tonnes in global ice loss. 58% of this ice loss occurred in the Northern Hemisphere.

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The Briefing

  • Due to global warming, 28 trillion tonnes of ice have melted in just over two decades
  • Over half (58%) of this global ice loss occurred in the Northern Hemisphere

Visualizing Earth’s Global Ice Loss Between 1994-2017

Nearly 70% of the Earth’s freshwater is locked up in glaciers and ice caps, ground ice, and permafrost. However, this ice is melting at an unprecedented rate.

Based on data from a new scientific survey, this visualization reveals that 28 trillion tonnes of Earth’s ice has been lost between 1994 and 2017.

How Much Ice Is Being Lost Exactly?

Figures at such scales can be difficult to wrap our heads around. For the record, one billion tonnes of water is equal to 400,000 Olympic swimming pools.

It’s then a bit easier to comprehend why, when multiplied tens of thousands of times, this much melted ice—specifically, grounded ice—has resulted in global sea levels rising by 34.6mm on average.

Cryosphere categoryIce typeChange (1994-2017)
Arctic sea iceFloating7.6 trillion tonnes
Antarctic ice shelvesGrounded6.5 trillion tonnes
Mountain glaciersGrounded6.1 trillion tonnes
Greenland ice sheetGrounded3.8 trillion tonnes
Antarctic ice sheetGrounded2.5 trillion tonnes
Southern Ocean sea iceFloating0.9 trillion tonnes

Over half (58%) of the ice loss occurred in the Northern Hemisphere, from Arctic sea ice and also grounded ice previously trapped in the Greenland ice sheet.

In fact, the rate of ice loss has risen from 0.8 trillion tonnes to 1.2 trillion tonnes per year, an increase of 57% since the 1990s.

The Impacts of the Ice Meltdown

Rapidly disappearing sea ice has severe impacts on the environment, both in the short and long term:

  • Wildlife habitat loss
  • Coastal erosion
  • Changing ocean currents
  • Extreme temperatures

While rising temperatures are behind most of this historical global ice loss, it’s worth noting that lower levels of ice lead to a positive feedback loop. Less ice means less of the sun’s heat is reflected away from the Earth, instead being absorbed back and further amplifying the global warming effect.

>>Like this? Then you might like this article on Mapping Territorial Claims in Antarctica

Where does this data come from?

Source: Slater, T. et al. “Review article: Earth’s ice imbalance”, The Cryosphere (2021)
Notes: Data from the scientific survey is based on satellite observations and numerical models. The metric measure of a “tonne” (1,000kg) has been used throughout for accuracy.

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Coinbase Experiences Brisk User Growth Ahead of IPO

Coinbase, America’s largest cryptocurrency exchange, saw a 117% growth in transacting users from Q4 2020 to Q1 2021.

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coinbase user growth

The Briefing

  • Coinbase is the largest cryptocurrency exchange in the U.S.
  • The company added 3.3 million transacting users in Q1 2021 – a 117% increase
  • $133 billion in assets were added to the platform, totalling $223 billion in Q1 2021

Coinbase Experiences Brisk User Growth Ahead of IPO

A week before its initial public offering (IPO), Coinbase reported significant user growth for the first quarter of 2021.

In a report released on April 6, the cryptocurrency exchange claimed to have an estimated 56 million verified customers in Q1 2021—that’s an additional 13 million since Q4 2020.

What is Coinbase?

Launched in 2012, Coinbase is the largest consumer-facing cryptocurrency exchange in America.

The company offers a variety of products, such as an advanced trading platform, crypto wallets for retail investors, savings accounts for institutions, and even its own stablecoin that’s backed by the U.S. dollar.

A Surge in Monthly Users and Assets

In Q1 2021, Coinbase saw a 117% increase in transacting users compared to Q4 2020, from 2.8 million to 6.1 million. That’s the highest jump in users in the last three years:

QuarterMonthly Transacting Users% Change
Q1 20182,700,000--
Q2 20181,200,000-55.5%
Q3 2018920,000-23.3%
Q4 2018850,000-7.6%
Q1 2019800,000-5.9%
Q2 20191,300,00062.5%
Q3 20191,200,000-7.7%
Q4 20191,000,000-16.7%
Q1 20201,300,00030.0%
Q2 20201,500,00015.4%
Q3 20202,100,00040.0%
Q4 20202,800,00033.3%
Q1 20216,100,000117.9%

In addition to its growing user base, the company also reported a 147.8% uptick in assets on the platform in the last quarter, from $90 billion to $223 billion.

QuarterAssets Held on Coinbase% Change
Q1 2018$13 billion--
Q2 201812.9 billion-0.8%
Q3 201811 billion-14.7%
Q4 2018$7 billion-36.4%
Q1 2019$8 billion14.3%
Q2 2019$21 billion162.5%
Q3 2019$17 billion-19.0%
Q4 2019$17 billion--
Q1 2020$17 billion--
Q2 2020$26 billion52.9%
Q3 2020$36 billion38.5%
Q4 2020$90 billion150.0%
Q1 2021$223 billion147.8%

Industry experts believe this strong start to the year is a good indicator of the company’s future profit potential.

For instance, the investment bank DA Davidson raised Coinbase’s share price target from $195 to $440 after seeing the company’s Q1 results.

>> Liked this? Take a deeper dive into institutional trading volume on Coinbase.

Where does this data come from?

Source: Company filings via The Block

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