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On the subject of Tesla, let's talk about one of the biggest S&P 500 inclusion busts of all time: Yahoo $YHOO. https://www.ally.com/do-it-right/trends/teslas-new-street-cred-the-sp-500/
Remember Yahoo? It was a search engine before we were all saying “I’ll just Google it”.
It was actually my parents’ home page back in high school
It was actually my parents’ home page back in high school
Well, Yahoo got the nod to join the S&P 500 in November 1999.
Investors were so stoked that Yahoo's shares soared 50% in six trading days (the S&P 500 was up just 1% over that period).
Investors were so stoked that Yahoo's shares soared 50% in six trading days (the S&P 500 was up just 1% over that period).
Yahoo officially joined the S&P 500 at market close on December 7, 1999.
The day after, Yahoo shares dropped 8%. Oof.
The day after, Yahoo shares dropped 8%. Oof.
BUT that’s not the end of the story. You thought that was it? 
In the first month, Yahoo shares bounced back and soared 27%.
We entered a new century.
We survived Y2K.
http://Pets.com IPOed.
The internet trade was on
.
In the first month, Yahoo shares bounced back and soared 27%.
We entered a new century.
We survived Y2K.
http://Pets.com IPOed.
The internet trade was on
.
Everything was going great (with some stumbles)...until Valentine’s Day 2000.
Yahoo gets hit by a DDoS attack and goes down for a few hours. The shares drop 52% (!!!) in one day
Yahoo gets hit by a DDoS attack and goes down for a few hours. The shares drop 52% (!!!) in one day
Yahoo never really recovers that drop, and it hobbles along for a few weeks.
Then, the tech bubble burst in March 2000.
Then, the tech bubble burst in March 2000.
Yahoo drops another 85% from March 27, 2000 through the end of the year.
