Apple to lose weighting in Russell index, shares could fall

“After dropping more than $200 billion in market capitalization in one year, Apple shares could fall further as they are set to lose their weighting and be reclassified in the annual reconstitution of the widely followed Russell indexes,” Rodrigo Campos reports for Reuters. “When all is said and done, about $1.3 billion more will be sold in Apple Inc shares at the market close on Friday, when the reconstitution of the Russell indexes takes effect, according to an analysis by Credit Suisse.”

“Because Apple has been aggressively buying back and retiring its stock, outstanding shares have dropped to less than 5.5 billion from 5.8 billion in late June 2015, when the Russell indexes were last recalibrated, according to Reuters data,” Campos reports. “Apple’s weighting in the Russell 1000 will roughly fall to 2.52 percent from 2.77 percent, Credit Suisse said. The decline is due to the combination of fewer shares outstanding and Apple’s smaller part of the index’s capitalization.”

“With the changes, fund managers who are pegged to the index, including exchange-traded funds, will have to sell the stock to match the new, lower weighting,” Campos reports. “Adding to the selling pressure, Apple will be classified as both a value and a growth company at Russell. After the close on Friday, 92 percent of Apple will be considered ‘growth’ and 8 percent ‘value’ according to index provider FTSE Russell, splitting it between two Russell subindexes. The move matters because value managers that peg their investments to the Russell indexes will be buying Apple while growth managers will be selling.”

Read more in the full article here.

MacDailyNews Take: Growth is not over at Apple.

15 Comments

        1. Mike, He said “Gulliver” as in Gullivers travels.. not Goliath.

          PS, what has david slew goliath got to do with Apple becoming the next big ruler of the world with all things Apple becoming the standard of what companies and people buy????

    1. Apple is an easy target to bring down its value. Day after day, the same rhetoric is thrown at Apple. Apple shareholders won’t be getting any free passes like Amazon, Alphabet or Microsoft. It’s rather disappointing how Apple is always being targeted for losses and myriad reasons for dumping the stock.

  1. Russel 2000???

    Big fsucking deal… Pft!

    The Russell 2000 Index is a small-cap stock market index of the bottom 2,000 stocks in the Russell 3000 Index.

    1. You must not have a 401K, right?

      Even if you were some sort of financial wizard, there'[s a good deal of capital tied up in 401k investments that use the russell index to calculate value.]

    2. I’m of similar opinion breeze, as I have deposited below. That this number of meager meaning prescribes what chain is pulled in the fantasy factor is sad. Thinking continues to go out of style. What a shame.

      ‘Clinkity-Clunk’ said the fund manager, devoid of human thought.

      1. “Devoid of human thought”, full of FUD.

        Unfortunately Derek, “sad” is indeed the theme of these times, god forbid anyone should check the facts or use common sense, let alone think anymore…

  2. This sounds entirely idiotic, like a primitive ritual, people in feathers dancing up and down, worshiping the godz of finance, ignoring the fact that this is all game playing with the Russell Index merely being merely another card you pick up from the ‘Chance’ pile.

    IOW: BFD. 😛

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