NASDAQ to Reduce Apple’s Weight in Rebalance

Posted by at 9:36 am on April 5, 2011

NASDAQ OMX said Tuesday it would rebalance its NASDAQ-100 stock index to reduce Apple’s weight on the market. As of May 2, AAPL will move from its large 20.5 percent of the index to 12.3 percent. Among the biggest beneficiaries will be Microsoft, whose weighting in the index was reduced in the only other special rebalancing of the index 13 years ago. Microsoft will see its weighting boosted to 8.3% from 3.4%. Other companies will get more influence too, including Google (5.8 percent), Intel (4.2 percent), Microsoft (8.3 percent), and Oracle (6.7 percent). The aim is to give Apple a ratio relative to its size and not simply the number of shares.

For most stocks, the Nasdaq-100 changes will be relatively small. Netflix, for example, will see its share of the index fall just 0.06 percentage point to 0.5%.

The Mac designer’s relative share of the weight was considered a possible liability given the disproportionate share. Although its market cap is roughly twice that of Google’s, its five times higher market weight has meant that any changes in Apple’s fortunes had major effects on the NASDAQ as a whole. It will still be the largest single company on the index but won’t have as much of a ripple effect given both its reduced weight and the improved weight of other firms.

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