Tesla Motors Inc (NASDAQ:TSLA) has rocketed into a prime position on Wall Street, landing on the NASDAQ 100 Index as a replacement for Oracle Corporation (NYSE:ORCL), which went to the New York Stock Exchange. But will it end up on the S&P 500?

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Seeking Alpha contributor Germ Man (wonder what this person’s real name is?) considers the likelihood of this happening and what will occur if it does end up on the index, which is much more influential than the NASDAQ 100.

Tesla on the NASDAQ 100

Simply being on the NASDAQ 100 is an important milestone for a company like Tesla Motors Inc (NASDAQ:TSLA). The company just posted its first quarterly profit earlier this year and is expected to post losses again next week for its most recently completed quarter. Just by virtue of being on the NASDAQ 100, Tesla becomes eligible to be included in some prominent exchange-traded funds like the PowerShares QQQ and the First Trust NASDAQ-100 Equal Weighted Index Fund.

When Tesla joined the NASDAQ 100 index July 15, the stock continued to rise as expected. With short interest in the company continuing to be as high as it is, the only questions are when another short squeeze will happen and what will trigger it.

Could Tesla be on the S&P 500?

The Seeking Alpha contributor examined what would happen if Tesla Motors Inc (NASDAQ:TSLA) does end up on the S&P 500. He admits that it’s probably unlikely but says that it will likely trigger another short squeeze. Of course the S&P 500 is based on the market caps of 500 of the biggest companies in the U.S. Companies must have a market cap of $4 billion or more to be considered to be in the index, but Tesla meets that criterion since its market cap is pushing $16 billion at the moment. And there are four other requirements as well.

In terms of liquidity, Tesla Motors Inc (NASDAQ:TSLA) also makes the grade. It comes in with 1.91 in liquidity, which again is more than enough to beat the .6 liquidity requirement. Also we all know there is plenty of options trading being done on Tesla, in particular because of the history of short interest in the stock.

Where Tesla doesn’t qualify

One place where Tesla Motors Inc (NASDAQ:TSLA) wouldn’t make the S&P 500 is in float. While no one owns more than half of the automaker’s outstanding shares, it looks like the company exceeds the requirement that multiple entities can’t hold over 60 percent of outstanding shares. Obviously Tesla Motors Inc (NASDAQ:TSLA) also doesn’t meet the requirement for having four quarters of positive net income, and it’s unlikely to meet that requirement within the next year or so.

Whether Tesla Motors Inc (NASDAQ:TSLA) would qualify in the fifth criteria depends a lot on which other companies happen to be on the S&P 500 when it becomes able to be considered for it. It seems unlikely that it would be kept out because of there being too many automakers on the index. Currently only Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM) are the only automakers on the index, and foreign automakers are not eligible. Tesla could be a shoe-in whenever it becomes profitable enough and if the necessary adjustments for ownerships occur within its shares.

What happens then?

The contributor also looks at what happens to stocks when they’re first added to the S&P 500 index, and as expected, their value skyrockets in just a few days. Standard & Poor’s doesn’t give too many days’ notice that a company will be added.