Rather than just throw out ramping figures like “10x” could you please also provide something to support your post?
I assume you are referring to the figures contained in the following which details the transition process?
https://www.solactive.com/wp-content/uploads/2018/01/Overview-of-the-Transition-Process.pdf
That refers to the lower daily turnover volumes and market cap figures for companies already in the index. As far as I can understand it, however, those lower figures relate to whether the company can or cannot be part of the index at a particular date. I don’t disagree that PEN can be included in the index as it meets both the lower volume and lower market cap threshold for inclusion in the new index. Regardless, that document still contains a requirement for weighting of the index pool for all stocks included in the index come each “Selection Day” and it states that the maximum weigthing for any stock with
My biggest concern is that “On the 31st July 2018, the Transition Index will have exactly the same Number of Shares as the New Index” indicating the need to sell enough PEN between now and 31 July to ensure that the weigthing of PEN complies with the New Index maximum weigthing requirements.
If you have a different view or interpretation I would really like to hear it. I like PEN very much as a stock but don’t like its short term price target if a top holder needs to sell 20,000,000 shares in 3.5 months due to a holdings guideline it is now bound to track. So if you or anyone else can confirm that my understanding of this process is different it would be really appreciated.
