Story
Twilio to Join S&P 500 in Index Rebalance Driven by M&A
Summary
Cloud communications firm Twilio will be added to the benchmark S&P 500 index on Oct. 6, S&P Dow Jones Indices announced, triggering a series of changes across its MidCap and SmallCap benchmarks.
Cloud communications platform Twilio Inc. (NYSE:TWLO) will be added to the benchmark S&P 500 index, S&P Dow Jones Indices announced Thursday. The changes, which are driven by recent merger and acquisition activity, will take effect prior to the market open on Tuesday, Oct. 6.
S&P 500 Addition
Twilio is being promoted from the S&P MidCap 400 index to the widely followed large-cap benchmark. Its inclusion prompted an immediate reaction from investors, with Twilio shares rising 1.6% in after-hours trading. Such moves are typical as index-tracking funds, which manage trillions of dollars in assets, are required to purchase shares of new constituents to match the index's holdings.
Twilio will replace Warner Bros. Discovery Inc. (NASDAQ:WBD) in the index. The media company's removal is pending the finalization of its acquisition by S&P 500 member Paramount Skydance Corp (NASDAQ:PSKY), according to the announcement.
A Cascade of Index Changes
The rebalancing has triggered a domino effect across other S&P indices. A number of companies will be shifted between the MidCap 400 and SmallCap 600 benchmarks to fill the vacancies created by the promotions and corporate actions.
AdKey changes effective Oct. 6 include:
- FormFactor Inc. (NASDAQ:FORM) will move from the S&P SmallCap 600 to the S&P MidCap 400, filling the spot vacated by Twilio.
- Workiva Inc. (NYSE:WK) will join the S&P SmallCap 600, replacing FormFactor. Shares of Workiva gained 2.7% in extended trading on the news.
Spinoffs and Acquisitions Trigger Further Moves
A separate set of corporate actions involving Corteva Inc. (NYSE:CTVA) also contributed to the reshuffle. Following the recent spinoff of Vylor Inc., which joined the S&P 500 on Thursday, Corteva's market capitalization has been adjusted.
As a result, Corteva will move from the S&P 500 to the S&P MidCap 400 on Oct. 6. This move displaces Olin Corporation (NYSE:OLN), which will subsequently shift to the S&P SmallCap 600. Olin will replace chipmaker Qorvo Inc. (NASDAQ:QRVO), which is being removed due to its pending acquisition by Skyworks Solutions Inc. (NASDAQ:SWKS).
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