What happened

Shares of Trinseo S.A. (NYSE:TSE), a materials company specializing in synthetic rubber, latex binders, and plastic products, saw its stock jump on Tuesday. Shares were up 9.7% as of 12:19 p.m. EDT.

The stock's rise follows news that Trinseo is replacing WageWorks (NYSE:WAGE) in the S&P SmallCap 600 index.

A chart showing a stock price rising

Image source: Getty Images.

So what

Trinseo's promotion into the small-cap index comes after independent health savings account specialist HealthEquity (NASDAQ:HQY) announced it is acquiring WageWorks in a deal that gives it an enterprise value of approximately $2 billion.

Trinseo stock has plummeted over the past 12 months, declining 60% -- even when including today's rise. In its most recent quarter, sales fell from $1.2 billion in the year-ago period to $952 million. Free cash flow for the period was $58 million, down from $113 million in the same period in 2018.

Now what

Trinseo will replace WageWorks in the S&P SmallCap 600 before the market opens on Friday, Aug. 30, S&P Dow Jones Indices said in a press release Monday afternoon. Investors should ultimately make their investment decisions based on their analysis of Tinseo's fundamentals, not its prospects to be included in the index.

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