We recently updated you about Under Armour’s poor quarterly results. Since its situation will not improve much, this sportswear manufacturer will be removed from the S&P 500 index as of June 21. In its place, Keurig Dr. Pepper Inc. will be added to the S&P 500.
The S&P 500, an index of stocks of 500 major US companies, is one of the most widely followed stock indexes in the country and more or less the world. A company to be in this index would have to have a market capitalization of just over $13 billion, which doesn’t meet more companies that are in there. But Under Armour, especially after the recent declines, doesn’t meet that at all.
When this apparel maker was added to the Index in 2014, it had a market capitalization of nearly $9.5 billion. But today, its market capitalization is less than $5 billion, and so this fact, coupled with poor prospects, has caused its removal from the Index.
What does this mean for the company?
Usually, the fact that a company entering the S&P 500 will increase slightly in value as a full complement of people within the ETF is buying the S&P 500 and thus, in part, the newly added companies. When radiating out of the index, the same usually applies, the reverse of course.
Read also: Elon Musk is feeling bad about the economy and will lay off
So Under Armour will be included in an index where there are smaller market cap companies called the S&P Midcap 400, where the minimum market value of a company is $3.6 billion.
The company is looking for a new CEO
The company’s CEO, Patrik Frisk, also retired June 1. He has been in the position since January 2020. The current interim CEO is Colin Browne, who is also COO. The company is still looking for a new CEO and it is not clear which of the candidates will accept the offer of the company, which is facing somewhat big problems due to the current economic and geopolitical situation.
Post has no comment yet.