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Facebook to Join Nasdaq-100, Tech Indices


Facebook (FB) will finally hit the Nasdaq-100 Index, and is on its way to join a few sector exchange traded funds. This could pave the way for more social media companies in the future.

“The company is a lot more seasoned now,” Francis Gaskins of IPO Desktop Premium, a website devoted to IPO,s said in a report. Being in the Nasdaq-100 “takes away some of the stain of the botched IPO.” [ETF Performance Report: November]

Investors and fund managers are watching Facebook shares, as the company will be included into the Nasdaq-100 Index the morning of December 12, 2012. This also means the stock will be included in the $30.9 billion PowerShares QQQ (QQQ) . The fund will take the place of First Trust Dow Jones Internet Index Fund (FDN) as the largest ETF to hold the company, reports Benzinga. [Facebook: Which ETFs Will Like it?]

The inclusion within the tech index is a major feat for Facebook, which has struggled since the May 18 IPO that hit the market with a loud thud. The Nasdaq-100 is considered a big time, big name technology index, which also holds heavyweights such as Apple (AAPL) and Google (GOOG), reports Financial Review.

Shares of Facebook are currently trading around $27.71, which is 44% higher than the low seen on November 9 of $19.21 per share. The stock has gained value in recent weeks, despite concerns about a series of post-IPO lockup expirations that released hundreds of millions of shares for sale on the open market. [Facebook and the Social Media ETF]

“Inclusion in the Nasdaq-100 should be a positive for (Facebook), since a bunch of index funds and ETFs now have to buy to maintain a match with the benchmark,” Joseph Bonner of Argus Research said. [Apple Drags on Nasdaq-100 as Facebook Prepares to Join]

PowerShares QQQ

Tisha Guerrero contributed to this article.

Full disclosure: Tom Lydon’s clients own QQQ, AAPL, FB and GOOG.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.