The S&P 500 becomes S&P 502
S&P 502. It just doesn’t found right. Yet, another unorthodox dividend is causing the benchmark Standard & Poor’s 500 index to balloon to include 502 stocks.
Media firm Discovery Communications is paying investors one share of its Class C shares (DISCK) for every share of Class A (DISCA), Class B (DISCB) and Class C owned. This complex transaction, which is like a stock-split and dividend on a collision course, is leading S&P to include both the Class A and Class C shares in the index. The shares will be included in the S&P 500 starting on the end of trading Aug. 6.
It’s the second time this year the S&P 500 has expanded. In some ways, the S&P 500 is already the S&P 501 — although nobody calls it that. Back in March, S&P Dow Jones Indices announced it would include multiple trading lines of online advertising firm Google. That move took the S&P 500 to include 501 stocks.
The S&P 500 is arguably the most important index to investors. Not only is it used to track the performance of the broad market, it’s the index on which hundreds of billions of investors’ money is invested in through mutual funds and exchange-traded funds.
After the Discovery deal, it will include 502.
Source: Usatoday
