After getting passed over multiple times this year, Reddit Inc. (NYSE:RDDT) is finally punching its ticket into the S&P 500.
- RDDT stock is climbing. See the chart and price action here.
On Thursday, S&P Dow Jones Indices announced the social media platform will replace AvalonBay Communities Inc. (NYSE:AVB) in the benchmark index effective before the opening bell on Tuesday, August 18.
The seat is opening up because AvalonBay is being absorbed by fellow S&P 500 constituent Equity Residential (NYSE:EQR) in a merger of equals.
Shareholders of both apartment REITs overwhelmingly approved the deal this week — more than 99% of votes cast at each company’s special meeting — clearing the way for the transaction to close as soon as Monday, August 17. Under the terms, each AvalonBay share converts into 2.793 shares of Equity Residential.
Once the deal closes, the combined entity will drop both legacy names and rebrand as Vivmark Residential, trading on the NYSE under the ticker VMRK starting August 18 — and it will keep its spot in the S&P 500 rather than exit the index.
The Long Road to S&P 500
Reddit’s addition caps off a bumpy road to index inclusion. The stock was passed over in favor of Ferguson Enterprises (NYSE:FERG) earlier this month and lost out to Marvell Technology (NASDAQ:MRVL) and FLEX (NASDAQ:FLEX) back in June, despite meeting the market-cap and profitability bar analysts had flagged as a likely green light.
This time, the M&A-driven vacancy finally got it there — index fund managers will need to build Reddit positions ahead of the Tuesday open.
RDDT Stock Price Activity: Reddit stock was up 11.03% at $175.56 during after-hours trading Thursday, according to data from Benzinga Pro.
Photo: Shutterstock
Login to comment