Reddit lands in the S&P 500 still down 42% from its September peak

Reddit will be added to the S&P 500 before the start of trading on August 18. J.P. Morgan estimates the change will force index funds to buy 16.7 million of its shares.

The stock soared more than 11% Friday after S&P Dow Jones Indices confirmed the move.

S&P additions trail the benchmark by 2% after three months

Since its debut in March 2024, Reddit (RDDT) has traded an average of 5.98 million shares per day. Passive funds have to buy 16.7 million shares, or close to three full sessions of normal activity crammed into the rebalance.

Shares were near $175.69, and more than $201 million of the stock had already changed hands by 9:32 a.m. ET Friday. A later intraday quote had Reddit up 14.55% at $181.12.

Analyst Melissa Roberts at Stephens said new additions to the S&P 500 have historically outperformed the index from the announcement to the actual inclusion, with the biggest move coming the day after the news.

Once a stock is in, those gains tend to dissipate, she said, and additions have trailed the benchmark by about 2% in the three months following.

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