This article first appeared on GuruFocus.
Shares of social media site Reddit Inc (RDDT, Financials) soared more than 11% after S&P Dow Jones Indices indicated the business will be included to the S&P 500.Reddit to spin off AvalonBay Communities before market open Aug. 18 The immediate trigger is forced buying.JPMorgan predicts that funds that track the S&P 500 may need to buy 16.7 million Reddit shares or so. That's close to three times the stock's average daily trading volume since it went public in 2024. That buying pressure is a big reason for the rapid surge on Friday.But the picture as a whole is more muddled. Thru Thursday, Reddit was down more than 31% year to date and more than 42% below its record high from September 2025.Recent data also revealed weaker U.S. user growth as search-engine traffic became less dependable. Being part of the S&P 500 is a big deal for investors. The question now is whether Reddit can convert the index gain into a longer-term rebound.