Why Tesla Was Left Out of the S&P 500

Summary:Tesla Inc. was passed over for inclusion in the S&P 500 index, a move that put a halt to the parabolic run in the electric-car maker's shares. S&P Dow Jones Indices, which determines the makeup of the index, said Friday afternoon that online marketplace Etsy Inc., technology firm Teradyne Inc. and pharmaceutical company Catalent Inc. would be added in its quarterly rebalancing. Teslawhose shares have catapulted to new highs, partly in anticipation of joining the S&P 500was noticeably absent. Tesla shares dropped 21% Tuesday, their biggest one-day fall on record.

Questions:

1. According to the article, why were investors so "bullish" on Tesla's prospects?

2. What are the criteria by which S&P Dow Jones Indices decides whether or not to include a company in the S&P 500?

3. According to the article, what issues may have led to the decision not to include Tesla in the S&P 500?

4. Why would inclusion in the &P 500 potentially have boosted Tesla's share price?

5. How might have the acquisition of short-dated call options have contributed to recent increases in Tesla's share price?