Facebook Rises as S&P 500 Inclusion Seen Within Next Year

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Facebook Inc. gained as much as 3.1 percent in early trading amid speculation that the world’s largest social network may be added to the Standard & Poor’s 500 Index.
The shares increased as high as $24.01 as of 8:53 a.m. in New York. Before today, Facebook had dropped 39 percent since an initial public offering in May 2012.
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With a current market value of almost $60 billion, Menlo Park, California-based Facebook is likely to join the S&P in the next year, according to Jordan Rohan, an analyst at Stifel Nicolaus & Co. The timeline could follow that of Google Inc. (GOOG), which was added to index about 18 months after its public market debut in August 2004, he said.
“Inclusion in a major index would significantly broaden Facebook’s investor base, providing added liquidity and price support, and the addition would likely cause a near-term pop in the share price,” Rohan wrote in a research report. He upgraded the shares to buy with a $29 target price.
Already, Facebook’s market value exceeds that of several Internet companies in the S&P, including Yahoo! Inc., Priceline.com Inc. (PCLN) and Expedia Inc. (EXPE) At current levels, Facebook would be the 59th most valuable member of the index, Rohan said.
To contact the reporter on this story: Lisa Rapaport in New York at lrapaport1@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
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