Etsy saw its share prices jump six per cent on Friday after it was unexpectedly added to the coveted S&P 500.
The online marketplace was one of three US companies S&P Dow Jones said it would add to its indices later this month.
The S&P 500 is one of the most important stock market indices in the world, and is considered a key benchmark for the US’ largest companies with more than $11.2 trillion investments indexed or benchmarked to its performance.
Etsy’s surprise inclusion came as US department store Kohls and beauty giant Coty were dropped and Tesla, which is worth more than 20 times that of Etsy, was left out.
In order to be eligible for inclusion in the S&P 500 a company must have a stock market capitalisation of over $8.2 billion, have at least half of all its shares available to the public and have achieved positive earnings across its last four quarters.
Last month Etsy firmly established itself as one of the few winners of the pandemic, boosted significantly by its strategy of encouraging its sellers to create and sell masks.
During its second quarter, the online marketplace for independent sellers saw gross merchandise sales rise 145 per cent to $2.7 billion.
While Etsy’s strong performance is undeniable investors were sure that Tesla, now the world’s most valuable car manufacturer, would be included in the list.
“In a nutshell Tesla not getting into the S&P 500 will be a head scratcher to the bulls that viewed this as virtually a lock given all the parameters met,” Wedbush analysts Daniel Ives, Strecker Backe and Ahmad Khalil said in a note to their clients.