James Dennin, Kapitall: Facebook is joining the S&P 500. Twitter's going through the roof. All eyes are on social media stocks this week.
It was just announced that Facebook (FB) is joining the S&P 500 index, as well as the S&P 100 index of large American companies. Abercrombie & Fitch (ANF), JDS Uniphase Corp (JDSU), and Teradyne Inc. (TER) have all been removed from the index, and the change will go into effect after markets close at the end of next week.
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The move reflects Facebook's ascendence as an immense and profitable American company, as well as the market's acceptance of social media stocks – whose profitability and monetization schemes once drew skepticism.But Facebook isn't the only social media company in this sector that is making moves. In response to the rapidly growing value of the start-up sensation Snapchat – which recently brought in more than $50 million in additional funding – both Twitter (TWTR) and Instagram have added direct picture messaging. Tech and media stocks outside of social media have been having a much less exciting week. Just look at the revelations about Yahoo's (YHOO) finances, and the fact that it had under reported how much of its revenue comes directly from a single contract with Microsoft (MSFT). The company's new mail system has had a difficult role-out as well, and skepticism is starting to mount about a tech company whose valuable assets are all located overseas. So are social media tech stocks showing the new way forward? We gathered a list of some of our favorite publicly traded social media companies to add to your news feed.