It may be time to swipe right on some dating-services stock. Match Group—the owner of Tinder, OKCupid, Match.com, Hinge, and some 40 other dating apps—is being added to the S&P 500. It will join the key U.S. blue-chip index on September 20, S&P Dow Jones Indices said in a statement announcing the new changes.
Why is this a big deal?
If you are Match Group, this means the S&P 500’s secretive Index Committee has voted to welcome you into its elite 500-member club that includes the likes of Apple, Amazon, Tesla, and Berkshire Hathaway. Shares of Match Group were up almost 8% in early trading Tuesday following the news.
How does the Index Committee select these companies?
It’s less via a hard-and-fast set of rules than through a handful of criteria that committee members use to assess what they think the company’s value is. Among the factors considered are market capitalization, liquidity, something called the Global Industry Classification Standard, and how long the company has been publicly traded.
Match Group is that high performing?
Its market cap is currently more than $40 billion, better than Delta’s, Yum! Brands’, and Hilton’s. Thanks to this news, right now Match Group is also trading at around $160 a share, higher than Pfizer, another company that has seen a boost from the pandemic.
Match Group was spun off from IAC in June of last year. This was right as the company saw a surge in new users, with people shifting to online apps for dating because of lockdowns. Its recent earnings statement said Match Group expects business growth to spike again as everyone returns to bars and restaurants to meet Tinder matches in person.
So . . . which company is getting the boot?
Match Group will replace a pharmaceutical company called Perrigo, which will be demoted to the S&P MidCap 400.