Question 1

Why do index funds have to buy Reddit shares?

Accepted Answer

Funds that track the S&P 500 must hold every member of the index, so Reddit's addition forces them to acquire the stock. J.P. Morgan estimates that comes to 16.7 million shares, nearly three times Reddit's average daily volume of about 5.98 million shares.

Question 2

When does Reddit officially join the S&P 500, and which company is it replacing?

Accepted Answer

The change takes effect before markets open on August 18, with Reddit replacing AvalonBay Communities, which is leaving after agreeing to an all-stock merger with Equity Residential.

Question 3

How has Reddit's stock and business performed recently?

Accepted Answer

Reddit is down more than 31% in 2026 and over 42% from its September 2025 high, but it reported second-quarter net income of $253 million on revenue of $805 million, up 61% year over year, with management warning that search-engine referral traffic turned volatile late in the quarter.

AvalonBay

Reddit joins S&P 500, forcing index funds to buy 16.7 million shares

One sharp brief.
Every day.

AvalonBay

Reddit joins S&P 500, forcing index funds to buy 16.7 million shares

One sharp brief.Every day.

One sharp brief.
Every day.