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Shares of advertising technology company AppLovin and stock trading app Robinhood Markets each jumped about 7% in extended trading on Friday after S&P Global said the two will join the S&P 500 index.
The changes will go into effect before the beginning of trading on Sept. 22, S&P Global announced in a statement. AppLovin will replace MarketAxess Holdings, while Robinhood will take the place of Caesars Entertainment.
In March, short-seller Fuzzy Panda Research advised the committee for the large-cap U.S. index to keep AppLovin from becoming a constituent. AppLovin shares dropped 15% in December, when the committee picked Workday to join the S&P 500. Robinhood, for its part, saw shares slip 2% in June when it was excluded from a quarterly rebalancing of the index.
Technology companies Datadog and DoorDash became part of the S&P 500 earlier this year.
It’s normal for stocks to go up on news of their inclusion of a major index such as the S&P 500. Fund managers need to buy shares to reflect the updates.
AppLovin and Robinhood both went public on Nasdaq in 2021. Robinhood has been a favorite among retail investors who have bid up shares of meme stocks such as AMC Entertainment and GameStop. AppLovin itself became a stock to watch, with shares gaining 278% in 2023 and over 700% in 2024. AppLovin’s software brings targeted ads to mobile apps and games.
Earlier this year, AppLovin offered to buy TikTok. U.S. President Donald Trump has repeatedly extended the deadline for a sale, most recently in June.
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