Now Reading: Reddit jumps 15% on S&P 500 inclusion, replacing AvalonBay
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Reddit jumps 15% on S&P 500 inclusion, replacing AvalonBay
Reddit shares surged about 15% after S&P Dow Jones Indices said the social media platform will join the benchmark S&P 500 index, replacing AvalonBay Communities. The change takes effect before markets open…
The Story in Brief
Reddit shares surged about 15% after S&P Dow Jones Indices said the social media platform will join the benchmark S&P 500 index, replacing AvalonBay Communities. The change takes effect before markets open on August 18.
J.P. Morgan analysts estimate index funds must buy 16.7 million Reddit shares, nearly three times the stock’s average daily volume since its public listing in March 2024. Reddit, now worth about $30 billion, becomes only the second pure-play social media company in the index after Meta. However, the stock had fallen 31% this year before the announcement and is down 42% from its all-time high reached in September 2025.
The Indian Opinion
The S&P 500 inclusion has ignited a predictable hype, but the stock’s 42% fall from its peak and a weak user growth report this quarter remind us that index membership is not a cure-all. Stephens analyst Melissa Roberts notes that new additions typically outperform until inclusion day but then lag the benchmark by about 2% over the next three months. The real test will be whether Reddit can fix its search-engine traffic troubles and sustain revenue growth after the forced buying from funds fades.
Sources (5): economictimes.indiatimes.com, timesofindia.indiatimes.com, livemint.com, livemint.com (2), ndtvprofit.com
This story was synthesised by AI from the 5 sources linked above.
Updated: this story now draws on 5 sources.
