Shares in Yahoo! Inc surged 24% on Tuesday as investors scrambled to buy the stock on the day before the internet media company becomes a component of the closely-watched Standard & Poor’s 500 Index. Yahoo jumped $67.1875 to close at a record $348 after trading as high as $353. A total of 66.3 million shares traded hands, easily making Yahoo the most active Nasdaq stock for the session.
Yahoo shares have more than doubled in value this year and have risen more than $135 since its inclusion in the index was announced a week ago. The company’s market capitalization has jumped to $91.6bn with the move, up from about $56bn last week.
Inclusion in the S&P 500 usually sparks quick gains for a company’s shares because fund managers who want to match the performance of the closely-watched index must buy into the stock. With no news from the company to support investor enthusiasm, however, the current rally will likely be short-lived, analysts say.
