Ark Invest founder and famous Tesla bull Cathie Wood has joined company boss Elon Musk in criticizing the S&P 500’s decision to remove the electric car maker from its market-tracking stock index. most sustainable and socially responsible companies.
Tesla was removed from the S&P 500 ESG Index – short for “environmental, social and governance” – despite a business model centered on the development of environmentally friendly technologies such as electric vehicles.
“Ridiculous. Deserves no further response,” Wood tweeted on Wednesday in response to a post detailing the change.
Tesla is a key holding for Ark, which has risen to prominence amid a surge in high-growth tech stocks in recent years. However, the ARK Innovation ETF has struggled as tech stocks come under pressure during a market downturn – plunging more than 50% in 2022 so far this year.
Tesla was the largest company to be excluded from the S&P 500 ESG Index due to the weight of its stocks relative to the overall value of the index. Tesla represents about 2% of the general 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 practices. internal.
Margaret Dorn, Senior Director and Head of ESG Indices, North America, S&P Dow Jones Indices, highlighted ongoing racial discrimination allegations at Tesla’s California plant and a federal investigation into accidents involving Tesla’s Autopilot technology. the company.
“Both of these events negatively impacted the company’s S&P DJI ESG score at the criteria level, and subsequently its overall score,” Dorn said. “While Tesla may be playing its part in taking gas-powered cars off the road, it has lagged behind its peers when examined through a broader ESG lens.”
The decision drew a scathing response from Musk, who blamed Tesla’s exclusion on what he described as “faux social justice warriors” and said the S&P had “lost its integrity”.
“Exxon is ranked in the top ten in the world for Environmental, Social and Governance (ESG) by the S&P 500, while Tesla didn’t make the list! ESG is a scam,” Musk said. .
Later, Musk lashed out at the Democratic Party, revealing that he had switched allegiance to the GOP. He also warned that he expects a “campaign of dirty tricks” from left-leaning figures in the coming days.
Tesla’s removal from the index was the latest blow to the company. Stocks are down nearly 40% so far this year during the broader tech sector downturn.
Wood frequently comments on major storylines Musk is involved in. Last month, the prominent tech investor revealed that Ark was steadily reducing its stake in Twitter while noting that the company was in “a lot of management distractions” related to Musk’s takeover bid.
Musk’s takeover deal on Twitter is currently on hold while he seeks to clarify the number of bots within the social media site’s overall user base.