Some motorcycle news from Wall Street, as we get word that Harley-Davidson will be removed from the S&P 500 list effective June 22nd.
A key index for a snapshot on the state of the American business landscape, the S&P 500 gets its name because it measures the stock performance of 500 large companies listed on stock exchanges in the United States.
Being included on the S&P 500 is point of prestige for a brand, and Harley-Davidson’s removal is sure to be a psychological blow to the company, which has been struggling as of late.
There is likely to be a minor financial hit to Harley-Davidson stock as well, as certain investment funds can only invest in S&P 500 companies, usually as a means of managing risk.
Harley-Davidson’s removal almost certainly has to do with the company’s struggling stock price and its subsequent drop in market capitalization because of that struggle.
Harley-Davidson currently has a market cap of $3.89 billion, which is well shy of the $8.2 billion that is normally required for a brand to be included on the index.
With S&P moving Harley-Davidson to its S&P MidCap 400, this move seems to confirm the notion that Harley-Davidson is no longer consider a large-capitalization firm worthy of the S&P 500 designation.
In addition to Harley-Davidson being removed from the S&P 500, two other companies – Nordstrom Inc. and Alliance Data Systems Corp. – will also be removed from the index.
They will be replaced by Tyler Technologies Inc., Bio-Rad Laboratories Inc. and Teledyne Technologies Inc.
Source: Milwaukee Journal Sentinel