The status of S&P 100 constituent stock will come to an end in '18! Nike (NKE.US) urgently clarifies: it is still a S&P 500 component

The Zhitong Finance App learned that Nike (NKE.US) is about to be removed from the S&P 100 Index, ending its nearly 18-year history as a constituent stock. Faced with some market questions raised by related news, Nike's investor relations team emphasized that this adjustment only involves the S&P 100 index. Nike is still a component of the S&P 500 index and will not affect the company's business, strategy, operation, or listing position.

According to the quarterly adjustment results previously announced by S&P Dow Jones Indices, Nike will be officially removed from the S&P 100 Index on September 21, ending its status as a constituent stock for nearly 18 years since the end of 2008. Honeywell Aerospace (HONA.US), Simon Real Estate (SPG.US), and Colgate (CL.US) were also excluded along with Nike. Dell Technologies (DELL.US), Palo Alto Networks (PANW.US), Arista Networks (ANET.US), and SanDK.US (SNDK.US) will replace these four companies in the S&P 100 index.

Nike specifically emphasized that the company is still a component of the S&P 500 index, and this index adjustment will not affect the company's business, strategy, operation, or public listing status. Nike declined to comment further on the report.

Nike's exclusion from the S&P 100 Index this time is closely related to the continued contraction in the company's stock price and market value in recent years. Up to now, Nike's stock price has fallen by more than 40% this year and is on its way to the fifth consecutive year of annual decline. The company's current market value is about 55 billion US dollars, down more than 80% from the historical peak of about 281 billion US dollars set in November 2021.

In contrast, the S&P 100 index and the S&P 500 index both continued to rise this year, and are expected to record annual gains for the fourth year in a row. As a result, the gap between the overall performance of Nike and major US blue-chip stocks widened further.

Although being excluded from the S&P 100 Index itself will not change Nike's basic business, index adjustments usually receive great attention from investors, because passive funds that track relevant indices need to adjust their positions accordingly, which may put some pressure on stock trading before and after the adjustment takes effect.

According to the data, the iShares S&P 100 ETF, which tracks the S&P 100 index, currently manages assets of about $20 billion, of which it holds about $19 million in Nike shares. Therefore, after Nike is removed, the fund and other passive funds tracking the S&P 100 index may need to sell related positions.

However, compared to the amount of capital to track the S&P 500 index, this portion of potential sales is relatively limited. The Vanguard S&P 500 ETF, which tracks the S&P 500 index, has over $1 trillion in assets under management and currently holds more than $700 million in Nike shares. Furthermore, a comparable State Street S&P 500 index fund holds about $560 million in Nike shares, while the iShares Core S&P 500 ETF holds about $575 million.

Since Nike remains in the S&P 500 index, these huge S&P 500 passive funds will not be forced to sell Nike shares due to this S&P 100 component stock adjustment.