Now Reading: Reddit surges 14% on S&P 500 inclusion, replacing AvalonBay
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Reddit surges 14% on S&P 500 inclusion, replacing AvalonBay
Reddit shares surged more than 14% on Friday after S&P Dow Jones Indices said the social media platform will join the S&P 500 index, replacing AvalonBay Communities. The change takes effect before…
The Story in Brief
Reddit shares surged more than 14% on Friday after S&P Dow Jones Indices said the social media platform will join the S&P 500 index, replacing AvalonBay Communities. The change takes effect before markets open on August 18. J.P. Morgan estimates index funds tracking the S&P 500 will need to buy 16.7 million Reddit shares, nearly three times the stock’s average daily trading volume. Reddit was trading at around $175.69, though the stock is down more than 31% this year and over 42% from its September 2025 all-time high. AvalonBay is being removed after agreeing to an all-stock merger with Equity Residential.
The Indian Opinion
The narrative that index inclusion is a sure sign of sustained success is being pushed hard, but history tells a different story. J.P. Morgan data shows that newly added stocks often give back gains and lag the benchmark by about 2% over the next three months. Reddit’s own stock is down 31% this year from its all-time high, despite a strong revenue jump. The real test is whether the company can maintain user growth and ad revenue beyond the one-time buying from index funds. Watch the stock’s performance after the August 18 inclusion date.
Sources (4): economictimes.indiatimes.com, timesofindia.indiatimes.com, livemint.com, livemint.com (2)
This story was synthesised by AI from the 4 sources linked above.
