Twitter shares surged as high as $40.16 during Tuesday’s session, their highest in more than 3 years, after S&P Dow Jones Indices said late on Monday the stock will be added to the S&P 500 index before trading opens on Thursday (7th June).
The stock replaces Monsanto Co, which is being bought by Germany’s Bayer AG.
Trading volume on Twitter on Tuesday quickly topped 40 million shares. It had already eclipsed the average daily volume from the past 10 sessions within about the first half hour after the market opened.
“The S&P 500 is without a doubt the most tracked index in the world,” said Dave Nadig, managing director of news and analytics publisher ETF.com. “All of those investors now have to own Twitter stock whether they want to or not.”
The S&P 500, designed to measure the large-cap segment of the U.S. stock market, is often considered a proxy for the market itself. Exchange-traded and mutual funds with assets of more than $700 billion tracks the S&P 500, according to research service Lipper.