New York, NY – Three notable companies, KKR & Co. Inc., CrowdStrike Holdings, Inc., and GoDaddy Inc., are set to join the S&P 500 as part of the latest quarterly weighting change, according to an announcement from S&P Dow Jones Indices on Friday. These additions will replace Robert Half Inc., Comerica Inc., and Illumina Inc., and are scheduled to take effect before trading begins on Monday, June 24.
KKR, a New York-based company, is making its entry into the index, reflecting the significant growth of the private investment business in recent years. The firm, founded in 1976 by Henry Kravis, Jerome Kohlberg, and George Roberts, has ambitious plans to manage assets worth at least $1 trillion in the next five years, targeting retirees and individuals. Known for its private equity ventures, KKR has diversified its strategies across buyouts, credit, infrastructure, real estate, and insurance.
In after-hours trading, KKR’s shares surged by 6.5%, signaling positive investor sentiment towards the company’s inclusion in the S&P 500. CrowdStrike and GoDaddy are also entering the index at a time when investors are gravitating towards software companies to leverage the growth potential of cloud computing and artificial intelligence.
CrowdStrike, a cybersecurity firm, experienced a 9% increase in its stock price in after-hours trading. The company’s stock has more than doubled over the past year, making it the second-best performer in the Nasdaq 100 Index after Nvidia Corp. On the other hand, GoDaddy’s shares have risen by approximately 30% leading up to the recent announcement, with a further 4% increase in after-hours trading on Friday.
Qualifying for the S&P 500 requires companies to be highly liquid US firms with a market capitalization of at least $18 billion, meeting specific profitability, liquidity, and share-float standards. Inclusion in this benchmark is crucial for companies seeking to enhance their investor profile and boost trading liquidity, potentially driving their stock prices higher. Conversely, exclusion from the index can have negative implications as passive investors are obligated to sell shares and realign their portfolios with the new composition of the S&P 500.
Overall, these changes in the S&P 500 composition illustrate the evolving landscape of the financial markets and the increasing importance of benchmark indices in the realm of passive investments. As companies like KKR, CrowdStrike, and GoDaddy make their debut in the index, the spotlight shines on their growth trajectories and how they navigate the opportunities and challenges of the market.