Following news that the social media giant Facebook would be joining Standard & Poor's 500-stock index by next week, the company's stock jumped by 4.3 percent on Wednesday during after hours trading. Facebook is trading under "FB" on NASDAQ.
Facebook's inclusion into the prestigious list will be complete by Dec. 20. This will bring to a close a lot of rumors about Facebook's inclusion into the said list of America's 500 top companies.
During Wednesday's after hours trading, Facebook stocks jumped in value to $51.27, increasing by a total of $2.09. The company will be replacing Teradyne's spot on the S&P 500 list. On the S&P 100 list, the company will be taking the spot of The Williams Companies.
When Facebook's IPO came out last May 2012, the company was able to raise a total of $16 billion, which raised the company's value to $104 billion. During the IPO, shares were sold for $38 and the company was able to sell a total of 421 millions shares. However, the price of the company's shares during their IPO was a cause for concern for many analysts, especially in light of the fact that the value of the stocks dropped by 50 percent 4 months after the IPO.
While Facebook joins the list, Abercrombie & Fitch Co. will be dropped from the list, according to an announcement from S&P. Abercrombie was a popular company but has recently been losing favor among many consumers. After the news of the company's failure to make the list, Abercrombie shares dropped by 1.7 percent to $32.70.
The S&P 500 list is one of the most respected company metrics in the country and is often used to gauge the current state of the American economy. Getting into the list is often a big step for a lot of companies since the S&P has strict criteria before including companies in the list. S&P 500 companies are chosen based on their industry, market capitalization, and liquidity as well as market size. Other notable technology companies in the list include industry giants Google, eBay and Microsoft.
During premarketing trading on Thursday, Facebook's shares were up 3.69 percent at $51.20.
