Robinhood shares dipped after being overlooked again for inclusion in the S&P 500, with Interactive Brokers chosen instead.
Key Takeaways
- Robinhood and Strategy stocks fell after missing inclusion in the S&P 500, which instead welcomed Interactive Brokers.
- Interactive Brokers replaced Walgreens in the S&P 500 due to a private-equity buyout deal involving Sycamore Partners.
- Robinhood’s market cap has surged nearly 200 percent this year but still failed to meet S&P inclusion criteria.
- Analysts see potential upside for Robinhood due to its crypto exposure and growing institutional interest.
What Happened?
Robinhood and MicroStrategy, now trading under the name Strategy, both saw their stock prices dip after being passed over for the S&P 500 inclusion. Despite significant recent gains and growing investor interest, the benchmark index instead chose Interactive Brokers Group to replace Walgreens Boots Alliance, which is exiting due to a pending acquisition by Sycamore Partners.
Robinhood misses out on yet another S&P 500 rebalance. Here’s who will be added. https://t.co/48RbJwASx9
— MarketWatch (@MarketWatch) August 25, 2025
S&P 500 Selection Leaves Robinhood on the Sidelines Again
Interactive Brokers will officially join the S&P 500 before market open on Thursday. Its shares jumped more than 4 percent in after-hours trading following the announcement. Walgreens is being removed from the index because of its acquisition by private equity firm Sycamore Partners.
Robinhood had been widely expected to be included. After all, its stock has rallied over 190 percent this year, fueled by renewed retail investor enthusiasm and crypto-related momentum. The company’s market capitalization is fast approaching the 100 billion dollar mark, making it eligible in terms of size. Still, it fell short on other criteria or lost out to what the S&P 500 committee viewed as a more balanced choice.
Key facts about the selection process include:
- Companies must have a market cap of at least 22.7 billion dollars.
- They must be profitable, U.S.-based, and listed on the NYSE, Nasdaq, or Cboe.
- Selection is determined by a committee, which considers factors like sector balance, liquidity, and trading volume.
Market Reaction: Robinhood and Strategy Decline
Following the news, Robinhood shares dropped by 1.26 percent during regular trading and dipped another 0.5 percent in after-hours trading to 107.40 dollars. It regained momentum and currently trading at $107.94.
Similarly, Strategy (formerly MicroStrategy) ended the session down 4.17 percent, falling another 0.6 percent after hours to 341 dollars. Later in the day, it regained momentum and is currently trading at $343.20.
Meanwhile, Interactive Brokers (IBKR) saw its shares jump by 3.9 percent in extended trading, closing at 65.21 dollars.
Analysts Still Bullish on Robinhood
Despite the snub, analysts at Citizens JMP continue to recommend Robinhood shares, citing strong potential upside due to crypto integration. The passage of the GENIUS Act by President Trump on July 18 is expected to support broader digital asset adoption, further benefiting Robinhood’s business model.
Analysts also pointed to ongoing rebounds in the M&A and IPO markets, which are expected to be favorable to Robinhood’s growth. However, others caution that the stock may now be overvalued at current levels given its rapid rise.
Missed Chances and Growing Frustration
This is not the first time Robinhood has been passed over. Earlier in June, the S&P Dow Jones Indices made no changes during its quarterly rebalancing. In recent months, other companies such as Trade Desk, Datadog, and Block Inc. were added to the index, all while Robinhood remained on the outside.
As one of the most anticipated additions, Robinhood’s continued exclusion has left some investors deflated. The inclusion could have brought increased visibility, stronger institutional backing, and automatic buying from index-tracking funds. For now, Robinhood must continue proving its long-term financial stability and relevance.
CoinLaw’s Takeaway
I get why Robinhood fans are frustrated. In my experience watching market dynamics, S&P 500 inclusion is like getting a stamp of legitimacy that really matters. It boosts liquidity, adds credibility, and opens the doors to institutional investors who might have otherwise overlooked a stock like Robinhood. The fact that it keeps getting passed over despite its massive rally tells me the S&P committee is looking for more than hype and price gains. There’s something about Robinhood’s financial profile or business model that still gives them pause. I found the inclusion of Interactive Brokers a bit surprising, but it shows the S&P is still prioritizing stability and profitability over momentum and headlines.
