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Reddit shares jump after S&P 500 inclusion decision
J.P. Morgan estimates index funds tracking the S&P 500 will need to buy 16.7 million Reddit shares, far above the stock's typical daily volume.
Reddit shares surged more than 11% on Friday after S&P Dow Jones Indices said the social media company would join the S&P 500, replacing AvalonBay Communities, according to Reuters.
Analysts at J.P. Morgan estimate index funds tracking the benchmark will need to buy 16.7 million Reddit shares, which is nearly three times the stock's average daily trading volume of about 5.98 million shares since its March 2024 IPO, based on LSEG data. By 9:32 a.m. ET, Reddit was trading at $175.69, with shares worth more than $201 million changing hands.
The move comes as Reddit has faced a difficult year, down more than 31% through Thursday's close and down more than 42% from its September 2025 all-time high. In its most recent earnings report, the company said choppy search-engine traffic weighed on U.S. user growth in the second quarter, though it issued an upbeat revenue forecast.
AvalonBay is set to be removed after agreeing in May to an all-stock merger with Equity Residential to form a rental housing company, Vivmark Residential, with an enterprise value of $69 billion. The deal is expected to close in the second half of 2026, and the combined company is expected to remain in the S&P 500 after the merger, S&P Dow Jones Indices said.
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