(Bloomberg) — Private equity giant Blackstone Inc. is the latest addition to the S&P 500 Index, the first alternative asset manager to join the equity benchmark. Airbnb Inc. Also added.
Most read from Bloomberg
New York-based Blackstone and Airbnb will replace Lincoln National Corp. and Newell Brands Inc. before trading begins on Sept. 18, S&P Dow Jones Indices said in a press release late Friday.
Shares of Blackstone, the world’s largest alternative asset manager, were up 4.1% in after-hours trading, while Airbnb rose about 4%.
Wall Street analysts predicted Blackstone would be added to the S&P 500 after the S&P Dow Jones’ decision in April to overturn a 2017 rule barring corporations with multiple share classes from index membership. Blackstone has a dual share structure with unequal voting rights.
To qualify for the S&P 500, companies must be highly liquid U.S. companies with a capitalization of at least $14.5 billion and meet profitability, liquidity and stock float standards. As of July 5, limits range from $5.2 billion to $14.5 billion and $850 million to $5.2 billion for the S&P MidCap 400 Index and S&P SmallCap 600 Index, respectively.
Additions and deletions to the S&P 500 usually, but not always, occur when the index is adjusted quarterly. They can also happen at other points in the year, such as mergers and acquisitions. S&P Dow Jones makes these adjustments to account for changes in market capitalization and, occasionally, to adjust for market volatility.
Being included in a benchmark is becoming increasingly important for companies in a world dominated by real estate investment funds. Additionally, a spot in the coveted S&P 500 raises a company’s investor profile and increases its exposure to the stock market — factors that can boost a company’s stock price.
Last week, Tylenol and Listerine maker Kenvu Inc. replaced Advance Auto Parts Inc. in the S&P 500. The move comes after Kenvu Records split from Johnson & Johnson.
Read more: J&J’s Kenvu swap opens door to longs, longs and index funds
Meanwhile, the Lincoln National and Newell brands were removed from the S&P 500 index. As passive investors are forced to sell stocks, and adjusting to the S&P 500’s new composition, a departure from the benchmark could weigh on stock prices.
— with assistance from Alexandra Semenova and Jessica Menton.
Most read from Bloomberg Business Week
©2023 Bloomberg LP