Reddit leaps 12% after-hours on S&P 500 inclusion news
The social media company will be the second pure-play social platform in the index.
Reddit shares jumped about 12% in after-hours trading Thursday after S&P Dow Jones Indices announced that the user-generated content platform will join the S&P 500 on Aug. 18.
The company will become the second pure-play social media platform in the S&P 500 when its inclusion takes effect, following Meta Platforms.
Reddit will replace AvalonBay Communities, which is being acquired by Equity Residential, according to the announcement. Sun Communities will also join the S&P MidCap 400 on Aug. 20, replacing Webster Financial following its planned acquisition by Banco Santander.
The rally came after shares plunged more than 20% following the company’s earnings report, as investors focused on AI and shifting search algorithms despite a stronger-than-expected quarter. The stock remains down 31% year-to-date.
AI, tech, and the markets they move—in one daily briefing.
Daily. Free. Join 34,000+ readers across crypto, finance, and policy.
Reddit reported a 61% increase in revenue to $805 million, above the roughly $730 million analyst consensus, while net income increased to $253 million from $89 million a year earlier. Advertising revenue rose 64% to $762 million, and daily active users climbed 18% to 130 million.
The company expects third-quarter revenue of $860 million to $870 million, topping forecasts, but slowing US user growth and uncertainty around search-driven traffic remain key concerns.