Less than two years after its initial public offering, social networking site Facebook has joined the S&P index of some of the biggest companies in the world, replacing chip-testing equipment manufacturer Teradyne.
Eligibility for index
The decision follows Facebook reporting its fourth profitable quarter, one of the criteria that S&P uses to determine eligibility. Facebook shares rose 4% following S&P’s announcement after trading hours.
Companies that join in the S&P 500 can be registered on either the Nasdaq or New York Stock Exchange.
The S&P is considered the best representation of the United States stock market and a bellwether for the country’s economy.
Analysts see that Facebook’s move could add to the surge in the company’s shares this year.
After a botched initial public offering last year, Facebook shares declined to less than half of their initial $38 each, before recovering during summer of 2013.
The social networking site has been pleasing investors recently, reporting better than expected profit and strong mobile ad sales.