NASDAQ to rebalance Apple stock weight

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 while other companies will get more influence, 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.

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.

All of the changes could have a major impact on how Apple and other companies are traded on the index. It may see reduced incentives to spend on Apple shares for those who wanted to target the largest portion of the index.

The reclassification is nonetheless a reflection of the success attached to the company and its share value. Even after having reached a relative low of roughly $78 at the worst point of the economic slump in early 2009, it has bounced back to be one of the highest valued stocks, currently trading at about $341 per share. The NASDAQ had originally calculated Apple's weight based on a much smaller price and hadn't anticipated that the firm would become as important as it has.

By Electronista Staff