Robinhood shares soar 14% after getting long sought addition to S&P 500

Robinhood shares surged after S&P Global said it would add the online brokerage to the S&P 500, ending months of speculation about its addition.

Shares jumped more than 14% in midday trading on Monday. If that holds through the closing bell, Monday would mark the stock’s best day since early April.

S&P Global said Friday that Robinhood will replace Caesars Entertainment in the stalwart U.S. market index. The change will take place before the beginning of trading on Sept 22.

Robinhood’s inclusion follows several months of chatter on Wall Street about whether the company could earn a spot in the benchmark average.

Companies typically vie for a place in the S&P 500 because such an addition can catalyze billions of dollars in trading. Passive funds are typically expected to buy massive numbers of shares in the weeks following a stock’s addition.

“HOOD has been one of the largest eligible names in recent rebalancings/merger openings,” Bank of America analyst Craig Siegenthaler wrote in a note to clients last month.

Shares slipped in June after the company failed to get a place in the last reshuffling. When asked about the potential to join the index at Robinhood’s annual meeting that month, CEO Vlad Tenev said he was uncertain but optimistic.

“It’s a difficult thing to plan for,” Tenev said. “I think it’s one of those things that hopefully happens.”

But the stock’s pullback was shortlived, with shares of Robinhood now up more than 210% year to date. Despite a drop during the market sell-off in 2022, the stock has mostly surged since going public in 2021.

AppLovin, which S&P Global said would also get a spot in the index, jumped more than 10% on Monday. Shares of Caesars Entertainment and MarketAxess Holdings — the two stocks being taken out of the S&P 500 — both slipped in the session.

– CNBC’s Yun Li and Jordan Novet contributed to this report.