Robinhood Markets (HOOD) saw its shares tumble 5.18% in pre-market trading on Monday, following news that the company was not included in the S&P 500 index as many analysts had anticipated. This sharp decline comes on the heels of a strong performance last week, where the stock had risen more than 10%.
The S&P Dow Jones Indices made no changes to the S&P 500 index on Friday, disappointing investors who had pegged Robinhood as one of the most likely additions. The exclusion from this prestigious index can be seen as a setback for the popular trading platform, as inclusion often leads to increased demand for a company's shares due to index fund buying.
The pre-market plunge reflects a quick reversal of investor sentiment, highlighting the volatility often associated with stocks that are subject to speculative index inclusion. As the market opens, investors will be closely watching Robinhood's performance to see if this early morning drop persists or if bargain hunters step in to buy the dip.
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