Analysis: Activision Blizzard Being Added to the S&P 500 Activision Blizzard, Inc. is being added to the S&P 500 Index on Friday after the close, in a move that solidifies the company's dominance as a 3rd party developer.

Activision Blizzard, Inc. is being added to the S&P 500 Index on Friday after the close, in a move that solidifies the company's dominance as a 3rd party developer.

Activision Blizzard has a market capitalization over $20 Billion and continues to crank out mega hits with their diverse gaming franchises. The company will replace Pall Corporation in the Index and will now have increased institutional ownership by many fund managers who mimic the flagship stock market index. ATVI is up over 7% after-hours, but I would not chase this move. The stock trades at over 18 times forward earnings and at a premium to its growth rate.

Additions to stock market indices can also be viewed as a kiss of death for some companies as they become far more correlated to broad market moves. In a world where stock market futures trading determines individual stock movement, this addition to the S&P 500 may not be completely good news. It does validate the company's business model and is a credit to the hard work of everyone at the Activision Blizzard.

Game development is now a multi-billion dollar industry and the stock market is finally wising up to this fact that video games companies can be great investments. I want to reiterate that readers should not chase this after hours move in ATVI shares as I believe that the company is now priced for perfection with a dividend yield below 1% and a premium price-to-earnings ratio. The bar has been raised for Activision Blizzard, Inc. and it remains to be seen if they can continue their outperformance. ATVI has risen 5600% over the last 15 years.