So here's how my Friday night went: I was half-watching the market close, half-refreshing Nvidia's site trying to figure out if the RTX 3080 preorder page was actually live yet or if I was just imagining it, and then S&P Dow Jones Indices dropped their quarterly rebalancing announcement and ruined my whole vibe.
Tesla didn't make the cut.
If you don't follow this stuff closely, a quick rundown: every quarter the committee that runs the S&P 500 decides which companies get added or dropped from the index. Getting added is a big deal because a huge amount of index-fund and pension money is mechanically required to buy the stock the moment it joins, whether the fund manager likes the company or not. Tesla just posted its fourth straight profitable quarter, which is the box everyone assumed was the last one standing between it and inclusion. Market cap wasn't an issue either, it's sitting somewhere around $400 billion, which is bigger than plenty of companies already in the index. So the assumption going into Friday was pretty much "this is happening."
Instead we got Etsy, Teradyne, and Catalent. Fine companies! Not what anyone was bracing for.
I'll cop to having a small, mostly emotional stake in this. I bought a handful of shares right after the 5-for-1 split went into effect on August 31st, mostly because the split made the price finally look like something I could justify buying more than one share of, and partly because I figured index inclusion was close to a sure thing and I wanted to be sitting there when the buying pressure hit. That is, in retrospect, not a strategy, that's a hunch wearing a strategy costume. The stock had already had a genuinely ugly week before this news even landed, down hard on Thursday along with the rest of the big tech names in what people are calling the worst stretch for the Nasdaq since June, and it closed Friday somewhere in the low $400s after opening the week north of $470. Then the no-inclusion news hit after the bell, on a day the market's already closed for the weekend and Monday is Labor Day, so anyone holding shares gets to stew on it for three straight days before there's a single opportunity to do anything about it. Genuinely miserable design if you're a retail investor with a phone and too much free time.
Here's the part that actually bugs me though, more than my own bad timing. The S&P committee isn't running a pure checklist. Meeting the profitability and market cap requirements gets you eligible, it doesn't get you in. There's a whole layer of judgment calls about sector balance, trading liquidity, whatever else they feel like weighing that quarter, and none of it gets published in a way outsiders can actually audit. So you end up with financial journalists and Twitter (I refuse to call it X, that rebrand's still two-plus years off and I'm getting a head start on being annoyed by it) speculating about "index committee vibes" like it's tea leaves, because functionally that's what it is. A handful of people making a subjective call that moves billions of dollars around, with basically no transparency into how they weighed it. I don't think that's some outrageous scandal, but it's a weirder amount of unaccountable power than I think most people realize sits inside what feels like it should be a mechanical, rules-based process.
Robinhood's app also had one of its little wobbles Thursday during the selloff, which, if you've been around this blog a while you know is not a new complaint from me about that app. I keep telling myself I'll move everything to a real brokerage and then I don't, because moving brokerages is annoying and I am lazy.
Anyway. I'm not selling. Small position, I bought it half as an experiment and half because I liked the idea of owning a tiny sliver of something, and getting snubbed by an index committee doesn't change the car company underneath it. But I will say the whole thing has me way more interested in just building a new PC around one of these new graphics cards Nvidia announced Tuesday than in staring at a stock ticker for the next three days. The 3080's supposed to land September 17th at $699, which is the first GPU price in a while that's made me think "okay, actually, maybe" instead of just closing the tab. That's probably a better use of a long weekend than doomscrolling finance Twitter waiting for Tuesday's open.