What Happened?
Shares of financial services company Robinhood (NASDAQ: HOOD) jumped 7.7% in the afternoon session after traders speculated that it could soon be added to the S&P 500. This speculation was fueled by the official close of Hewlett Packard Enterprise's acquisition of Juniper Networks, which opened a spot in the index.
Inclusion in the S&P 500 is highly sought after by companies because it often leads to increased demand for their stock from index funds and ETFs that track the S&P 500.
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What The Market Is Telling Us
Robinhood’s shares are extremely volatile and have had 57 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
Robinhood is up 154% since the beginning of the year, and at $100.07 per share, has set a new 52-week high. Investors who bought $1,000 worth of Robinhood’s shares at the IPO in July 2021 would now be looking at an investment worth $2,873.
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