Well it looks like the aftermarket pop on Friday was just the appetizer.
After seeing its shares rise by 6% in Friday aftermarket trading after news hit that it was being added to the prestigious S&P 500 index, US neobroker Robinhood Markets Inc (NASDAQ:HOOD) witnessed a much larger, double-digit share price increase of 16% once “real” market trading resumed on Monday.
Robinhood shares hit a high of $117.30 on Monday – close to their all-time-high of $117.70 – before settling to close at $117.28, still up 16% on the day. Shares of Robinhood have more than tripled so far in 2025, up 214.76% since January 1.
Robinhood share price 2025 year-to-date. Source: Google Finance.
Interestingly, research from S&P Dow Jones Indices itself shows that the index effect of being added to a major stock index has waned, from 8% last century to basically nil. However Robinhood shareholders and investors clearly believe that Robinhood’s inclusion could have major positive repercussions for the company.
Which could actually make sense.
In a very competitive online brokerage business, especially while competing for the accounts of high-volume and large-deposit clients, the reputation of the broker is very important, leading to heavy spending on branding by many brokers. A good example of that phenomenon is the increase in spending by brokers on all manner of sports sponsorships, especially those involving top-drawer European football clubs – such as Robinhood’s own recent front-of-shirt sponsor deal signed with French football club OGC Nice.
And the “endorsement” of being an S&P 500 company will indeed likely help Robinhood with its branding among a very important client demographic.
