The beloved individual investor GameStop Corp. it is now three times more valuable than the smaller S&P 500 shares, thanks to a strong accumulation of its shares in August.
Some traders are betting that GameStop could make another leap further if S&P Dow Jones Indices adds shares to the S&P 500 when it rebalances later this year.
Getting an action on the most viewed index is not a simple or predictable process. Unlike indices such as the Russell 2000, whose composition is determined primarily by criteria such as market capitalization, the S&P 500 is built by a committee of human beings. The identities of committee members, who are full-time staff at S&P Dow Jones Indices, remain anonymous.
“Entering the S&P 500 is a combination of art and science,” said Art Hogan, chief market strategist at National Securities Corp.
Committee members have some rules to follow when deciding to make changes to the S&P 500. Companies that are added to the index must be highly liquid U.S. companies with a market capitalization of at least $ 13.1 billion, for example. In addition, the committee has room for maneuver to decide on changes.