Facebook Inc (NASDAQ:FB) shares are falling a bit today, as the social media giant joins the NASDAQ 100 index for the first time. Investors are wondering if the stock will recover and gain some ground on the news.
In afternoon trading, shares of Facebook Inc (NASDAQ:FB) were down more than 1 percent in spite of the tech stock being added to the Nasdaq 100 index, which is the top 100 most-valuable, non-financial stocks traded on the Nasdaq. Last week, investors learned that Facebook Inc (NASDAQ:FB) would be added to the index as a replacement for Infosys, which has moved to the New York Stock Exchange.
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There is a possibility that Facebook will see a lift, thanks to it being added to the NASDAQ 100 (INDEXNASDAQ:NDX) because some exchange-traded funds and mutual funds, which follow the index will have to buy shares of the stock. According to Nasdaq, the estimated invested value of the index is $1 trillion, so being added to that index is an important distinction to note.
USA Today reports that this is an excellent time for Facebook’s stock to be added to the index. Facebook Inc (NASDAQ:FB) went public in May for $38 per share, and the company’s stock fell about 50 percent. It’s been in the process of recovering in recent weeks, since the shares hit their low on Sept. 4 at $17.73 per share. Some investors have become bullish on the stock, especially because of Facebook’s apparent success in mobile advertising and its popular Sponsored Stories campaign. Analysts believe these new streams of revenue could open the door for high profits for the social media giant in the near future.