Monsanto is out and Twitter is in.
A day after Bayer announced it would kill the Monsanto brand after its $63 billion takeover, expected to close on Thursday, S&P Dow Jones Indices announced that the social media company Twitter (TWTR) will replace Monsanto on the S&P 500. Likewise, Netflix (NFLX) will replace Monsanto on the S&P 100.
Although the move will not go into effect until just before the market opens on Thursday, Twitter’s stock jumped as much as 5% in after-hours trading following the announcement on Monday. The announcement pushed Twitter’s stock to $39 a share in what has already been a good year. Growth in user-ship and profits have contributed to a 58% year-to-date increase in the stock and more than 100% year over year.
Still, the choice is somewhat unorthodox. As The Wall Street Journalpoints out, companies are supposed to have four straight quarters of profit before joining the S&P 500. Twitter only has two following 16 quarters of losses, though the company expects to be profitable for the rest of the year.
Twitter’s stock struggled after going public in 2013, and analysts are apparently still not convinced of the stock’s resilience. The average forecast predicts a 19% decline for the stock in the next 12 months.