Robinhood joins S&P 500, a watershed moment in the US fintech industry
Robinhood Markets has replaced casino operator Caesars Entertainment on the S&P 500 benchmark. This is a significant moment for the Financial Technology sector, as the retail trading platforms joins the ranks with the most influential U.S. firms.
S&P Dow Jones Indices announced the inclusion on Friday. This is expected to increase demand for Robinhood stock, as index-tracking fund managers adjust their holdings. This also highlights Robinhood's transformation from a trading startup during the pandemic era to a company that has a sustained influence on U.S. Financial Markets.
The platform is credited with revolutionizing retail trade by eliminating commissions, making stock investing easy through an app that's user-friendly and has attracted a whole new generation of American investors.
Other firms that will be joining the S&P 500 include marketing platform AppLovin, and mechanical and electric construction services company Emcor. These two firms will replace MarketAxess, a bond trading platform, and Enphase Energy - a solar inverter manufacturer.
Included in the S&P 500, a company’s stock will typically rise as exchange-traded and passive funds that track the benchmark are forced into buying in. This creates a surge in demand.
Analysts view it as an indication of financial stability, and the credibility of the market in general. This has led to increased interest by institutional investors.
Changes will take effect before the market opens on September 22.
In extended trading, shares of Robinhood rose by 7.3%. AppLovin rose 7% and Emcor gained 2.2%.
According to LSEG, Robinhood's shares have nearly doubled in value this year. The company now has a market cap of $91.5 billion.
The crypto exchange Coinbase was the first digital asset company to be included in the S&P 500 index, bringing new legitimacy to the U.S. Financial Technology sector. (Reporting by Arasu Kannagi Basil and Manya Saini in Bengaluru; Editing by Pooja Desai and Shilpi Majumdar)
(source: Reuters)
