Moderna (NASDAQ: MRNA), an American pharmaceutical company best known for its Covid-19 vaccine, is being added to the S&P 500 Index later this month. The news is set to ensure a positive boost for the company amid investor awareness. The stock rose 8% during premarket trading on Friday upon the novelty.
S&P revealed the news late Thursday, and Moderna shares were up 10% by Friday morning. The stock is currently up almost 175% this year, with a market value of over USD100 Billion.
The pharmaceutical company, along with various others in the industry, took action at the start of the global health crisis and were able to develop a Covid-19 vaccine. The shots have now been distributed to hundreds of millions of people worldwide.
By adding Moderna to the S&P 500, the scores of passively managed mutual funds and exchange-traded funds, which mirror the S&P 500, will need to also add the company’s stock to its portfolio. Ultimately, a key factor to the company’s stock increase on Friday.
Moderna will occupy the place of Alexion Pharmaceuticals, which is currently being acquired by Big Pharma giant AstraZeneca.
Investors had previously been hesitant about the stock as they asked themselves, what would happen when the vaccine is no longer a need? However, the surge of new coronavirus variants has led them to realize that vaccine sales are likely to continue into the next year. Furthermore, Moderna is said to develop a combined flu and Covid shot into 2023 and 2024.