Investors disappointed as Robinhood and AppLovin miss S&P 500 inclusion
- Robinhood and AppLovin were not added to the S&P 500 in the latest quarterly adjustments, disappointing investors.
- Both companies experienced a drop in share prices after the announcement, despite earlier gains influenced by speculation of potential inclusion.
- Research indicates that index membership may not significantly boost long-term stock performance, as proven by studies on market reactions.
In the United States, Robinhood and AppLovin have been notably absent from the latest adjustments to the S&P 500 index. This update, which occurred last Friday, brought disappointment to investors who had anticipated that the companies would be included. Following the announcement, both companies saw their shares decline: Robinhood's stock dropped by 3%, while AppLovin experienced an 8% fall. Prior to this announcement, both firms had seen favorable movements in their stock prices, attributed to rising speculation that they were strong candidates for inclusion in the prestigious index. Specifically, Robinhood's shares had surged by 26% in the preceding month, and AppLovin's shares rose nearly 11%. Investors hoping for quick gains based on the potential for S&P 500 membership faced setbacks as the index did not add any new companies in its quarterly rebalancing.