(Photo credit: Lionel Bonaventure/AFP/Getty Images)
Matt Krantz, USA TODAY
Facebook, the No. 1 social networking company, gained even more status with investors Wednesday after being added to the popular Standard & Poor's 500 index.
The company, which sold shares to the public for the first time in 2012, is replacing electronic gear testing maker Teradyne in the much-followed S&P 500.
Facebook is also replacing The Williams Cos. in the S&P 100 index of the very largest U.S. companies.
The changes go into effect after the close of trading Dec. 20.
Shares of Facebook jumped 4% in after-hours trading on the news. Facebook fell 87 cents, or 1.7%, to close at $49.38 in regular trading.
Being included in the benchmark S&P 500 index is a major accomplishment for Facebook, which got off to a rocky start with investors. Shares lost roughly half their value in the months following its May 17, 2012 initial public offering where shares were sold for $38 a share. Since that time, the stock has rocketed, including an 86% rally in the shares this year.
Based on its market value of $121.2 billion at the close Wednesday, Facebook would rank as the 30th most valuable company in the S&P 500.
The company is also demonstrating it's one of the first online companies to find a way to turn mobile users into lucrative sources of profit. Largely thanks to ads inserted in the screens of the Facebook apps on smartphones, the company posted a profit of $425 million during the third quarter, reversing a loss in the same year-ago period.
As part of the changes announced by S&P, Teradyne will replace educational material publisher Scholastic in the S&P MidCap 400 index. Scholastic will then replace for-profit education provider Lincoln Education Services in the S&P SmallCap 600. Williams remains in the S&P 500.