The Trade Desk soars, will be added to S&P 500
Ad tech software company The Trade Desk surged in the overnight session after the keepers of the S&P 500 announced it would be swapped out for engineering software company ANSYS in the blue-chip index on Friday. (ANSYS will be acquired by fellow index constituent Synopsys in a deal slated to close Thursday.)
Addition to major indexes confer real benefits on companies. Once a company is added to the index, “passive” investing products — ETFs, mutual funds, etc. — which mirror official benchmarks must buy the stock, regardless of what they think of its prospects, strategy, or leadership. Even better for CEOs, these managers can’t sell the stock unless it’s delisted or thrown out of the index.
And the S&P 500 is one of the biggest indexes. An estimated $10 trillion in assets were indexed to the market gauge at the end of 2023. That means a lot of money will be pouring into The Trade Desk this morning.
Of course, Trade Desk's gain means some other potential new joiners got passed over. Among those, AppLovin shares are the ones coming under the most pressure this morning, down about 2%.
Addition to major indexes confer real benefits on companies. Once a company is added to the index, “passive” investing products — ETFs, mutual funds, etc. — which mirror official benchmarks must buy the stock, regardless of what they think of its prospects, strategy, or leadership. Even better for CEOs, these managers can’t sell the stock unless it’s delisted or thrown out of the index.
And the S&P 500 is one of the biggest indexes. An estimated $10 trillion in assets were indexed to the market gauge at the end of 2023. That means a lot of money will be pouring into The Trade Desk this morning.
Of course, Trade Desk's gain means some other potential new joiners got passed over. Among those, AppLovin shares are the ones coming under the most pressure this morning, down about 2%.
