General Electric was one of the original 12 companies listed on the newly formed Dow Jones Industrial Average in 1896. After 122 years, it was the only original company that remained listed on the Dow index, although it has not continuously kept its place on the index.
CNBC is reporting GE’s stock has fallen more than 55 percent over the last 12 months, losing more than 25 percent this year alone.
The DJIA is a price-weighted index, and the range of prices among its 30 constitutes matter. The low price of GE shares means the company has a weight in the index of less than one-half of one
percentage point.
Walgreens Boots Alliance’s share price is higher, and it will contribute more meaningfully to the index. It will also help the index better represent the U.S. market and economy.
Walgreens Boots Alliance, which is headquartered in Deerfield, IL, operates as a pharmacy-led health and wellbeing company.
The change won’t disrupt the level of the index. The divisor used to calculate the index from the components’ prices on their respective home exchanges will be changed prior to the opening on June 26. This procedure prevents any distortion in the index’s reflection of the portion of the U.S. stock market it is designed to measure.