Wednesday was a good day all around for Pervasive Software (Nasdaq: PVSW), which sells Web development and information management software. The company was added to the Russell 2000 index and featured prominently in Investors Business Daily on Wednesday. Pervasive Software’s stock closed up 3-7/16 to 25-5/16, a gain of nearly 16 percent.
Being added to the Russell 2000 means that more mutual funds will buy the stock. This, in turn, raises brand awareness for the company. However, investors should keep in mind that the Russell 2000 is a small-cap index. It’s not as if Pervasive Software got added to the S&P 500. Joining the Russell 2000 is significant news, but it’s not certain whether that justifies a gain of almost 16 percent in just one trading session.