The fourth industrial revolution is taking place and with it begins a period of great redistribution of wealth. As so often in the last 200 years, this process is visible for the first time on the stock exchanges: The focus of investors is changing. Will the investor in algorithms soon set the rules?
ExxonMobil Booted From Dow Jones Industrial Average
On Monday, August 24th 2020 evening, oil giant ExxonMobil (NYSE:XOM) was officially removed from the Dow Jones Industrial Average.
The company had been a member of the index since 1928, when it was still known as the Standard Oil Company of New Jersey.
The change leaves ExxonMobil’s fellow oil major Chevron (NYSE:CVX) as the only oil and gas company in the Dow.
Tech beats oil
The shakeup was prompted by the upcoming 4:1 stock split of Apple. Unlike the S&P 500, in which components are weighted by market cap, the Dow is calculated based on its components’ share prices. Apple’s new cheaper price will give it — and by extension, the tech sector — less weight in the index. To compensate, the Dow swapped out business software company Salesforce for ExxonMobil.
With ExxonMobil’s exit, it will be the first time since 2008 that the oil and gas industry has only had one representative on the flagship index. It’s a sign of how far ExxonMobil’s stock has fallen over the past decade. The company’s shares are down 28.4% over the last ten years, to just over $42/share. Meanwhile, Chevron — despite having a lower market cap — has a higher share price, of more than $87/share.
Source: https://www.fool.com/investing/2020/08/25/exxonmobil-booted-from-dow-jones-industrial-averag/
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