Ark Invest founder and well-known Tesla bull Cathie Wood has joined company boss Elon Musk in criticizing the S&P 500’s decision to remove the electric carmaker from its stock index, which tracks the most sustainable and socially conscious companies.
Tesla was removed from the S&P 500 ESG index — short for “Environmental, Social and Governance” — despite a business model focused on developing green technologies like electric vehicles.
“Ridiculous. Not worthy of another reply,” Wood tweeted Wednesday in response to an article detailing the change.
Tesla is a key position for Ark, which has gained prominence in recent years during a surge in high-growth tech stocks. However, the ARK Innovation ETF has struggled as tech stocks have suffered during a market downturn — so far this year they’re down more than 50% in 2022.
Cathie Woods Ark Invest is a strong Tesla supporter.REUTERS
Tesla was the largest company excluded from the S&P 500 ESG Index based on the weight of its shares relative to the index’s total value. Tesla makes up about 2% of the broad index.
In a blog post, an S&P 500 executive noted that Tesla was delisted due to issues with elements of its business, including the lack of a low-carbon strategy and concerns about its internal practices.
Margaret Dorn, senior director and head of ESG indices for North America at S&P Dow Jones Indices, pointed to ongoing allegations of racial discrimination at Tesla’s California factory and a federal investigation into accidents related to the company’s Autopilot technology.
Tesla CEO Elon Musk also lashed out at the S&P 500 over the decision. REUTERS
“Both of these events had a negative impact on the company’s S&P DJI ESG Score at the criteria level and subsequently on its overall score,” Dorn said. “While Tesla may be doing its part to take fuel-powered cars off the road, it has fallen behind its peers when viewed through a broader ESG lens.”
The decision drew a scathing reaction from Musk, who blamed Tesla’s exclusion on what he called “social justice false warriors” and said the S&P had “lost its integrity.”
“Exxon is ranked among the top 10 environmental, social and governance (ESG) companies in the world by the S&P 500, while Tesla didn’t make the list! ESG is a scam,” Musk said.
Cathie Wood has ripped Tesla’s removal from a key index. AFP via Getty Images
Tesla shares are down almost 40% this year.REUTERS
Musk later lashed out at the Democratic Party, revealing that he had changed allegiance to the GOP. He also warned that he expects a “dirty tricks campaign” from left-leaning figures in the coming days.
Tesla’s removal from the index was the latest blow to the company. Shares are down nearly 40% so far this year amid the broader tech sector downturn.
Wood frequently comments on key storylines involving Musk. Last month, the prominent tech investor revealed that Ark has been steadily reducing its stake in Twitter, while noting that the company would face “a lot of management distraction” in the wake of Musk’s takeover bid.
Elon Musk said “fake social justice fighters” were responsible for the move.
Musk’s Twitter buyout deal is currently on hold while he seeks clarity on the number of bots within the social media site’s overall user base.