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Financial technology company Block Inc. is joining the S&P 500 index, according to a statement from S&P Dow Jones Indices.
Block, founded by Jack Dorsey, will be included in the index, replacing energy giant Hess Corp. The change follows Chevron's $53 billion acquisition of Hess and will take effect before the market opens on July 23.
Following the news, Block shares rose 14% in after-hours trading.
Inclusion in a major U.S. stock market index like the S&P 500 increases a company's visibility and is becoming increasingly important with the growth of passive investment funds. Companies excluded from the index may face selling pressure as funds linked to the index reshuffle their portfolios.
Changes to the S&P 500 typically occur during quarterly rebalancing. However, in special circumstances, such as large acquisitions, there can be changes outside the index. Last week, monitoring software company Datadog was added to the index, replacing Juniper Networks.
Block's addition to the index further strengthens the S&P 500's tech bias. Known as Square and continuing its growth with payment terminals, the company has expanded into cryptocurrency, lending, and other financial services over the years, changing its name to Block.
*This is not investment advice.