Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Apple Stock Price Is Too High for Dow Industrials, Bespoke Says

Don't Miss Out —
Follow us on:
Apple Stock Price Is Too High for Dow Industrials
Apple, trading at about $420, would have the largest weighting in the 30-company measure because Dow companies are ranked by stock price, not market value. Photographer: Chris Ratcliffe/Bloomberg

Sept. 20 (Bloomberg) -- Putting Apple Inc. in the Dow Jones Industrial Average would mean the benchmark gauge would get 22 percent of its value from the iPhone maker, too much influence even for the world’s largest company, according to Bespoke Investment Group LLC.

Apple, trading at about $420, would have the largest weighting in the 30-company measure because Dow companies are ranked by stock price, not market value. Replacing Kraft Foods Inc. with the Cupertino, California-based company would drive International Business Machines Corp. down to 9.2 percent from 11.6 percent of the Dow, Bespoke said in a report today. IBM closed at $173.13 yesterday.

“Don’t hold your breath,” Bespoke, based in Harrison, New York, wrote in a note to clients, citing speculation today that Apple may enter the Dow. “If the stock were added to the index without a split in the shares, it would have a disproportionate weight in the index, making it more like the Dow Jones Industrial Apple.”

Richard Silverman, a spokesman for Dow Jones Indexes, declined to comment.

Apple had its weighting in another benchmark measure, the Nasdaq-100 Index, reduced this year. Nasdaq OMX Group Inc. cut the company’s share of the Nasdaq-100 Index to about 12.33 percent from 20.49 percent. While the exchange imposed rules in 1998 preventing the biggest corporations in the index from having too much sway, Apple’s market capitalization was too small to qualify for a curb at the time.

Shares of Apple jumped 91-fold between 1997, when the San Francisco Chronicle said Steve Jobs would be appointed interim chief executive officer, and his resignation in August. The company’s market value has surged to about $384 billion.

To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.