Zhitong Finance and Economics learned that S&P Dow Jones Indices announced that the mobility company Uber (UberUS), *chain management electronic design company Jabil Technology (JBL.).US), building materials company Builders FirstSource (BLDRUS) will be included in the S&P 500 index, and the adjustment will take effect before the market opens on December 18. Affected by this news, after the U.S. stock market on Friday, Uber rose more than 5%, Jabil Technology rose more than 3%, and Builders FirstSource rose more than 2%.
At the same time, packaging company Sealed Air (seeUS), Alaska Airlines (ALKUS) and Solaredge Technologies (SEDG.)US) will be removed from the S&P 500 index. All three** U.S. stocks fell more than 1% after hours on Friday.
Wall Street analyst Zeng ** said that after Uber's third-quarter results showed a second consecutive quarter of profitability, the company will be included in the S&P 500 index, which is a requirement for a company to be included in the benchmark index. Prior to its inclusion in the S&P 500, Uber was one of the largest companies in the United States eligible for inclusion in the index, with a market capitalization of more than $118 billion.
Uber's ride-hailing business continued to expand faster than analysts expected in the third quarter, with total bookings up 31% year-over-year, driven by improved drivers**, increased travel from back-to-school, and the return of business travel. Uber also launched new products in the last quarter, such as its partnership with Alphabet (GOOGL.).US) has partnered with Waymo, starting in Phoenix to offer ride-hailing services for self-driving cars on its app.
Analyst Mandeep Singh said Uber's inclusion in the S&P 500 index would encourage the company's CEO, Dara Khosrowshahi, to focus on his mission to be profitable. "This also establishes Uber's position as an industry leader among its peers in the gig economy," the analysts said. He added that scale is "the most important thing" for any market, and Uber has proven that it has that in terms of demand and **.
According to the data, a company eligible for inclusion in the S&P 500 index must be a highly liquid U.S. company with a market capitalization of at least $14.5 billion and must meet profitability, liquidity, and liquidity criteria. The S&P 500 usually adjusts its constituents when it rebalances each quarter, but not always, and this adjustment can happen at other times, such as after a merger. S&P Dow Jones Indices makes these adjustments to reflect changes in market capitalization, sometimes in response to market volatility.
In a world where passive investing** is increasingly dominant, inclusion in benchmark indices is becoming increasingly important for businesses. Having a spot in the coveted S&P 500 index can boost a company's investor profile and increase trading liquidity, which can push up a company's share price.