Twilio gets the nod, as current component Warner Bros. Discovery is set to merge with Paramount
Twilio, which makes technology for customer communications, has won a spot in the S&P 500.
The S&P 500 will get a bit of a shakeup in the aftermath of corporate deal-making.
S&P Dow Jones Indices announced on Thursday that Twilio $(TWLO)$ will soon join the benchmark index SPX, replacing Warner Bros. Discovery $(WBD)$, which is in the process of being acquired by Paramount Skydance $(PSKY)$. That change is effective before the open of trading on Oct. 6.
Shares of Twilio were up 1.5% in after-hours action on Thursday.
Twilio, with a market cap of $46 billion, makes various technologies that allow companies to communicate with their customers. It offers voice, chat, email and other options, and it has been billing itself as an artificial-intelligence play at an intriguing time: when more shoppers are letting AI assistants negotiate with customer-service representatives on their behalf.
"AI agents have the ability to drive significantly higher communications flows, unlocking incremental demand," TD Cowen analyst Derrick Wood wrote in a note to clients last week.
He added that "when people hand off tasks to agents, more calls and texts can be made as a person's attention & time are no longer constraining factors." Not only could Twilio's technology help facilitate this influx of customer interactions, but also customers could find they have a greater need for Twilio's governance offerings that help make sure agent communications take place in a compliant manner.
Additionally, Vylor got Corteva's spot in the S&P 500. Corteva $(CTVA)$, a crop-protection company, spun off Vylor in a deal that closed Wednesday. Vylor $(VYLR)$ focuses on agriculture, advanced seed and genetics, and it has already been added to the index following the completion of that spinoff.
Corteva itself was a spinoff, having separated from DowDuPont in 2019. It's being moved to the S&P MidCap 400 index given its new, smaller size.
Oppenheimer analyst Kristen Owen wrote last month that Corteva recently "presented a solid standalone investment thesis built on the diversity and balance of its portfolio and innovation pipeline." The spinoff "allows for greater freedom to operate with other seed technologies companies" while preserving the close relationship between Corteva and Vylor, she noted.
Reuters earlier Wednesday reported that 15 U.S. states are suing Corteva alleging that Vylor was designed ?to shield Corteva's prime assets from billions of dollars in possible liabilities tied to PFAS, or man-made "forever chemicals."
Representatives from Corteva and Vylor didn't immediately respond to a MarketWatch request for comment.
-Claudia Assis -Emily Bary