HedgeFundLIVE.com — Just a thought but the timing of today’s special NASDAQ 100 rebalance is interesting. The last special rebalance was in 1998, a full 13 years ago. Why did the NASD decide to do another rebalance today. Well, admittedly, the index has gotten way out of whack with reality. For example, the implied shares outstanding based on AAPL’s weight in the index is 2.4bln shares vs the actual 921mln shares outstanding.
In any event, this special rebalance is basically bringing into line the index weighting with each company’s actual market capitalisation. So, with AAPL for example, it’s weighting is being reduced from 20.49% to 12.33%. The reason for the reduction is basically that AAPL has rallied so much since the last rebalance relative to other names in the index that its weighting has gotten out of line with the reality of its market cap. Having said that, could a more sinister reason for the special rebalance be that the NASD received a call from Apple informing them of some imminent future negative event related to Steve Jobs, who we all know is suffering from pancreatic cancer which BTW is uncurable.
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