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Reddit shares jump after deal-driven S&P 500 inclusion next week
The stock added 15% to around $181.70 at the open, boosted by an upcoming off-cycle S&P 500 change scheduled to take effect before trading on 18 August.
Reddit shares rose about 15% at the open to roughly $181.70 as the social networking company is set to join the S&P 500 next week. The index change is an off-cycle adjustment, with Reddit replacing AvalonBay Communities, which is being acquired by Equity Residential.
S&P Dow Jones Indices said Reddit will be added before trading on 18 August. LiveMint Markets noted the move is not tied to a change in Reddit’s fundamentals, but stocks can rally around index additions as benchmark-tracking funds rebalance to match their portfolios.
Alongside the index news, Reddit’s recent results have also kept investors focused. In its June quarter, the company reported eight consecutive quarters of sales growth, with revenue up 61% year over year to $804.9 million, and net income increasing 183% to $252.85 million.
Reddit also posted daily active users up 18% to 130.3 million and weekly active users up 24% to 514.6 million. The firm reported adjusted EBITDA more than doubling to $343 million, and it expects revenue of $860 million to $870 million and adjusted EBITDA of $385 million to $395 million for the current quarter, according to LiveMint Markets.
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