Uber to join S&P 500 index, signaling business turnaround - Hindustan Times
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Uber to join S&P 500 index, signaling business turnaround

AP | | Posted by Singh Rahul Sunilkumar
Dec 05, 2023 01:02 AM IST

Inclusion in S&P 500 boosts stock demand, driving up Uber shares

Uber is set to join the S&P 500 index later this month, the latest sign that the ride-hailing and delivery company is turning its business around after struggling through much of the pandemic.

 A photo illustration shows the Uber app and a black cab in London, Britain.(REUTERS)
A photo illustration shows the Uber app and a black cab in London, Britain.(REUTERS)

The San Francisco company will be added to the benchmark index prior to the opening of regular trading on Dec. 18, S&P Dow Jones Indices said late Friday.

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Inclusion in the S&P 500 can be a big boost for a stock because the index is widely tracked by many funds designed to mirror the holdings of the S&P 500, which is at the heart of many 401(k) accounts. That translates into more demand for stocks in the index, driving up their price.

Uber shares jumped 5.2% in midday trading Monday at $60.31 per share. That’s not far from their all-time high of $63.18 per share set in February 2021. The stock is up more than twofold so far this year.

The strong rally in Uber shares this year marks a major turnaround from as recently as the summer of 2022, when the stock was at $20.46 per share.

The pandemic severely stymied Uber’s ride-hailing business as government lockdowns kept most people at home. The work-from-home trend continued to limit the need for anyone to summon a ride on Uber.

The company reacted to the pandemic by building up a then-nascent food-delivery division that has now become a major revenue driver.

Uber’s ride-hailing service, meanwhile, has since gradually bounced back. It is now handling more rides than it did in 2019, raising the company’s hopes that it may finally realize its long-term of goal of becoming consistently profitable.

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