Tesla stock surges after it scores 4th straight quarterly profit, paving the way to the S&P 500

• Tesla stock surged as much as 5.8% in pre-market trading on Wednesday after the company made a profit for the fourth quarter in a row.
• Elon Musk's electric-car company reported $104 million in net income, a big improvement from its $408 million loss in the second quarter of 2019.
• Tesla is now eligible for inclusion in the S&P 500, which promises to expand its shareholder base.
• Musk also announced that Tesla will build its fourth US factory in Austin, Texas.
• Visit Business Insider's homepage for more stories.

  ---

Shares in Tesla jumped as much as 5.8% in pre-market trading after the group posted its fourth consecutive quarterly profit for the first time ever.

Elon Musk's electric-car company reported net income of $104 million for the three months to June 30, a sharp swing from its $408 million net loss in the second quarter of 2019.

Read More: Warren Buffett isn't warning about sky-high stocks because he 'doesn't want to make people mad,' veteran investor Bill Smead says

Its automotive revenues fell 4% year-on-year to below $5.2 billion as the coronavirus pandemic weighed on car sales. However, that was more than offset by $428 million in regulatory credits, up from $111 million in the same period last year.

Tesla's four profitable quarters in a row make it eligible for inclusion in the S&P 500. Joining the benchmark index promises to expand its shareholder base given the large number of tracker funds and institutional investors that seek exposure to it.

Read More: A Wall Street expert details the hurdles that must be cleared before a bitcoin ETF is approved — and explains why other investing substitutes for the crypto fall short

The group's stock price has more than tripled this year, and traded close to its all-time high as of Wednesday's close.

Its market capitalization is approaching $300 billion, dwarfing the combined value of the "big three" US automakers — GM, Ford, Chrysler — and comfortably beating both Volkswagen and Toyota, the biggest automakers in Europe and Asia respectively.

Musk also announced on Wednesday that his company will build its fourth US factory near Austin, Texas. It will manufacture Cybertrucks and Tesla Semis in the facility, as well as Model Y and Model 3 cars for East Coast customers, he added.

Join the conversation about this story »

NOW WATCH: A cleaning expert reveals her 3-step method for cleaning your entire home quickly

source https://markets.businessinsider.com/news/stocks/tesla-stock-price-reaction-4th-quarterly-profit-sp500-elon-musk-2020-7-1029423950