The possible return of GameStop shares to the S&P 500 in the hands of the Anonymous Committee

0
129

WSJ.com: Markets

The single investor favorite GameStop Corp. is now three times as valuable as the smallest S&P 500 stocks thanks to a sharp surge in its stocks in August.

Some traders are betting that GameStop could take another leap up if S&P Dow Jones Indices adds the stock to the S&P 500 when it is rebalanced later this year.

Inclusion of a stock in the most widely watched index is not a simple or predictable process. In contrast to indices such as the Russell 2000, whose composition is primarily determined by criteria such as market capitalization, the S&P 500 is created by a committee of people. The identity of the committee members who are full-time employees of S&P Dow Jones Indices will be anonymized.

“Getting into the S&P 500 is a combination of art and science,” said Art Hogan, chief market strategist at National Securities Corp.

The members of the committee have a few rules that they follow when making changes to the S&P 500. For example, companies that are included in the index must be highly liquid US companies with a market capitalization of at least $ 13.1 billion. In addition, the committee has leeway in deciding on changes.

Source Link

Leave a Reply