Facebook stock jumped close to 4 percent in after-hours trading Wednesday on news that the social media giant would join the Standard & Poor's 500-stock index at the end of next week.
The move will become official at the close of trading Dec. 20. It move ends months of speculation that Facebook, based in Menlo Park, Calif., would join the index of 500 influential U.S. firms.
"We view Facebook as a leading company from a leading industry, and we find that it's very representative of the technology sector," said a spokesman for S&P, Dave Guarino. "So it's a good fit for the S&P 500."
Facebook raised $16 billion in May 2012 through its initial public offering, which valued the company at $104 billion. It sold 421 million shares at $38 each, a price that drew criticism when the stock quickly began to slump, dropping more than 50 percent by early September 2012.
But the company's stock has slowly climbed since then, closing at $49.38 Wednesday. The company currently has a market capitalization of more than $120 billion.
Facebook will knock Teradyne, a testing equipment firm, out of the index. Teradyne, in turn, will replace the publisher Scholastic Corp. in the S&P MidCap 400, which lists companies with a market capitalization of $2 billion to $4.5 billion.
One of the most common benchmarks for the U.S. economy, the S&P 500 index chooses stocks based on a company's market size, liquidity and industry grouping. Other technology giants listed include Yahoo, Google, eBay, Yahoo and Microsoft.