According to yesterday’s closing prices, Hargreaves, which last year produced only £160 mn ($260 mn) in sales, is poised to join the UK index of blue chips, reports the FT’s Alphaville blog.
Given that Hargreaves is an illiquid stock – the free float only recently rose to 50 per cent after some director sales – there is likely to be a scramble for stock, notes Alphaville. From the blog:
Based on that 50 per cent assumption, Citi reckons trackers will need to buy 5.6 mn shares – the equivalent of 6.3 times average daily volume!
Good luck with that.