Warren Buffett's sale of a large stake in Apple has brought unexpected benefits to the company's investors, as its impact on stock indexes becomes fully clear. Finclub writes about this with a link to Bloomberg.
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Apple's weight in a number of benchmark indicators has been suppressed for many years years since Berkshire Hathaway Inc. Buffett tends to hold his investments over the long term, making them unavailable for trading.
As a result, the index compilers calculated the weight of the technology company based on a methodology known as float-adjusted market capitalization.
< p>For example, the S&P 500 currently accounts for only 94% of Apple's value, but after Buffett sells shares, this figure will rise to 100%. In a company with a market value of $3 trillion, this makes a huge difference.
Piper Sandler estimates that passive funds tracking these indices could be forced to buy up to $40 billion of Apple shares during the subsequent rebalancing, which significantly exceeds the average daily trading volume.
Although these changes will not be noticeable until the quarterly restatement of the index next month, traders are already beginning to act in anticipation of these events.
- Shares (securities) Stock market
