GE Kicked Out Of The Dow

Dow Jones announced this afternoon that General Electric (GE) is being removed from the Dow Jones Industrial Average for Walgreens Boots Alliance (WBA).

This isn’t completely unexpected. Here’s me three years ago:

GE simply doesn’t make up much of the Dow. The stock closed today at $12.99. That means it makes up about 100 points in the Dow, which is currently at 24,700. The average Dow stock makes up over 800 points in the index.

GE has been a Dow member for over 110 years. On November 7, 1907, General Electric replaced Tennessee Coal, Iron and Railroad Company in the Dow. GE was an original Dow stock in 1896 but it was dropped in 1898, added back in 1899, then dropped again 1901 and added back in 1907.

I find it interesting that many dystopian movies feature powerful corporations (Pan-Am in 2001 or Atari in Blade Runner). In reality, these organizations come and go faster than you think.

The current Dow divisor is 0.14523396877348. That means every $1 in a Dow stock is about seven Dow points. The divisor will now be adjusted for WBA. Here’s the GE chart going back 56 years:

Posted by on June 19th, 2018 at 10:47 pm


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