The stock of Reddit (RDDT) is up 12% on news that the social media platform is being added to the benchmark S&P 500 index.
Reddit, which runs online message boards such as Wall Street Bets, will replace real estate investment trust AvalonBay Communities (AVB) in the S&P 500 on Aug. 18.
The change was prompted by Equity Residential’s (EQR) acquisition of AvalonBay, with the deal nearing completion.
After the merger, the combined AvalonBay and Equity Residential will be renamed Vivmark Residential and will remain listed in the S&P 500 index.
Reddit, which has a market capitalization of $30 billion U.S., was selected for inclusion in the S&P 500 over smaller social media companies such as Etsy (ETSY) and Snap (SNAP).
Stocks that are added to the S&P 500 tend to rise as mutual funds and exchange-traded funds (ETFs) that track the index are required to buy the shares.
The S&P 500 index is comprised of the 500 largest publicly traded companies in the U.S. based on market capitalization.
Prior to today (Aug. 14), RDDT stock had declined 35% this year to trade at $158.12 U.S. per share.
