Reddit joins the S&P 500 on Tuesday — the stock popped 12.6% on the call
S&P Dow Jones Indices is adding Reddit to the benchmark before Tuesday's open, replacing AvalonBay. RDDT closed Friday at $177.97, up 12.6%, after trading as much as 16% higher intraday.
Reddit is getting the index call. S&P Dow Jones Indices said the social platform will join the S&P 500 effective before the open on Tuesday, August 18 — and the market did not wait. RDDT closed Friday at $177.97, up 12.6% on the day, after trading as much as 16% higher intraday. The company carries a market value near $34 billion.
The seat opened up through a merger, not a demotion. Reddit replaces AvalonBay Communities, which is being absorbed by fellow index member Equity Residential; the combined company — to be renamed Vivmark Residential — keeps its spot. Reddit takes the vacated one.
Index inclusion is one of the few events that forces buying. Every fund that tracks the S&P 500 has to own each member, so trillions of passive dollars must add RDDT around the effective date. That mechanical demand is why inclusion announcements gap stocks the way Friday gapped Reddit.
The pop landed on a stock that needed one. Our feed had RDDT closing as low as $153.47 on Wednesday before Thursday's $158.13 close — and even after Friday's jump it sits roughly 37% below its 52-week high of $282.95, following a volatile stretch dogged by questions about its reliance on Google search traffic.
History is mixed on what follows the confetti: the forced buying is real but front-loaded, and once the index funds are full, the business has to do the rest. The next test arrives fast — rebalance flows peak into Monday's close, and Tuesday morning Reddit trades as an S&P 500 company.
We will be watching the volume prints Monday afternoon. Follow RDDT live in the Terminal.