No matter extreme hopes, fulfilled included hitting four worthwhile quarters in a row.The company simply currently hit four worthwhile quarters in a row–a elementary state of affairs for inclusion inside the index.The case for Tesla bears and short-sellers is further sturdy now.Tesla posted its first-ever four consecutive worthwhile quarters decrease than two months up to now, nonetheless this was not enough to clinch a spot inside the coveted S&P 500 Index.Since Tesla achieved the feat of four worthwhile quarters in a row, getting included inside the large-chip index bought right here to be thought-about almost as a foregone conclusion. The index inclusion, plus a share minimize up, is extensively credited for the stock’s surge in the previous couple of weeks.Tesla received’t be included inside the S&P 500 Index, a minimal of for the next three months. | Provide: @richtechexec/TwitterBy turning into a member of the benchmark index, Tesla would have been included inside the portfolios of additional institutional merchants–thereby elevating demand for the stock.Now that dream isn’t any further, a minimal of for yet one more quarter. The index’s overseer, S&P Dow Jones Indices, undertakes a rebalancing every three months.A New Lease on Life for Tesla Bears and Fast-Sellers?With Tesla rejected by the S&P Dow Jones Indices committee, bears and short-sellers have however another reason to actually really feel justified.After the index overseer launched the most recent rebalancing, Tesla fell 7% in after-hours shopping for and promoting on Friday, indicating the market was disillusioned with the selection.Whereas it’s too early to tell, the S&P 500 snub and completely different parts have elevated the bearish sentiment spherical Tesla. The bears and short-sellers who’ve had a brutal 12 months can now sigh with discount.As of August 20, Tesla short-sellers had recorded mark-to-market losses of just about $25 billion given that 12 months started, in accordance with S3 Companions.For 2020, Tesla short-sellers made mark-to-market losses of over $20 billion as of August. | Provide: @ihors3/TwitterWith Tesla’s bullish argument not considerably strong now and with bulls deflated by the snub, the bears may have now been rejuvenated.Why Tesla Was Left Out of the S&P 500The S&P 500 snub will put the spotlight once more on Tesla’s unflattering aspect. One in all many causes cited for the non-inclusion is the provision of its present earnings.Throughout the first half of the 12 months, the EV maker generated $483 million in pre-tax earnings. This amount bought right here from selling regulatory credit score worth $782 million to completely different car producers.Tesla’s present earnings originated from regulatory arbitrage and by no means from its core enterprise.Primarily based on DataTrek analyst Nick Colas, this is ready to have put the S&P 500 index overseer in a “real bind.”Furthermore, Tesla’s valuation relative to the S&P 500 frequent might need been a cause for concern. Presently, Tesla’s stock is shopping for and promoting at over 230 events its anticipated 2020 earnings. The standard for S&P 500 firms is 26 events their anticipated earnings this 12 months.Compared with completely different S&P 500 firms, Tesla is overvalued based totally on anticipated earnings. | Provide: @connectajitcpr/TwitterAdditionally, along with Tesla inside the index would have resulted in undesirable volatility. As of Friday, the S&P 500 Index closed with a whole market cap of $28.9 trillion. Tesla’s entry would have given it a 1.35% share of the index’s entire. Tesla’s volatility would finish in further turbulence for the benchmark.Share Dilution Is ComingUpcoming share dilution is another reason for Tesla bears to actually really feel justified. Initially of the month, the EV maker launched it should promote new stock worth $5 billion.Tesla is elevating $5 billion inside the stock market after selling stock worth $2 billion in February. | Provide: @CNBC/TwitterThe agency will use the proceeds to strengthen its stability sheet along with for frequent firm capabilities. This comes merely months after Tesla carried out a secondary frequent stock offering to elevate $2 billion.Disclaimer: This textual content represents the author’s opinion and shouldn’t be considered funding or shopping for and promoting advice from CCN.com. Till in every other case well-known, the author has no place in any of the stocks talked about.