Reddit will join the S&P 500 index next week, replacing AvalonBay Communities to drive automatic demand for the social media platform's stock.
Reddit will join the S&P 500 index next week, replacing AvalonBay Communities. The S&P Dow Jones Indices announced that the social media platform will be added to the index before markets open on Aug. 18. This move will force index-tracking funds managing trillions of dollars to purchase shares in Reddit, creating automatic demand for the stock which has experienced a decline so far this year. Reddit replaces AvalonBay Communities, which is being removed from the index due to its acquisition by Equity Residential EQR. Inclusion in the S&P 500 requires companies to be profitable for the prior four years and meet specific market capitalization requirements. Reddit went public in March 2024 and has since become profitable, benefiting from a new advertising products and a growing user base. Shares of Reddit surged 15% to $182 shortly after trading opened Friday, following the news of its inclusion.