The reason that Twitter Inc will be replacing Monsanto has to do with a recent deal between the latter and Bayer. Bayer is in the process of merging with Monsanto and that deal is set to reach completion soon.
The change will have Twitter Inc joining the S&P 500 when markets open on Thursday, June 7, 2018. Dow Jones will be specifically adding the social media company to the S&P 500 GICS Internet Software & Services Sub-Industry index.
Twitter Inc isn’t the only company that is moving up thanks to the deal between Bayer and Monsanto. Monsanto’s merger will also have the stock leaving the S&P 100. Filling the open gap in this index is Netflix, Inc. (NASDAQ:NFLX), reports CNBC.
Netflix, Inc.’s shift to the S%P 100 makes sense, but there are some oddities about Twitter Inc joining the S&P 500. The biggest is that a company has to have four straight quarters of earnings before joining the index. TWTR suffered 16 quarters of losses and just recently saw two quarters of earnings back to back. However, it is expecting to report earnings for the rest of the quarters in 2018, reports Fortune.
News of the status changes for Twitter Inc and Netflix, Inc. have been good for the two company’s stocks. As of noon Tuesday, TWTR stock was up 5% and NFLX stock was up 1%.
As of this writing, William White did not hold a position in any of the aforementioned securities.