Exxon Mobil has to give way: Oil giant flies out of the first US stock market league

The upcoming stock split at Apple has immediate consequences for a veteran of the world's most famous stock index: the oil giant Exxon Mobil has to leave the Dow Jones on August 31. Instead, another tech company is emerging.

Tech boom and crisis in the old economy: The steep rise of many tech stocks in the corona pandemic and the dwindling importance of fossil energies are upsetting the world's most famous share index, the Dow Jones Industrial. The company that has been in the Dow for the longest time, the oil giant Exxon Mobil, has to leave the index at the end of August.

The trigger for the change is Apple's stock split, as the index provider S&P announced on Monday evening. As a result, the weighting of the iPhone group in the Dow Jones falls. Therefore, another tech value has to close the gap: the software expert and SAP rival Salesforce is the successor. Ultimately, the index is intended to map the US economy, which is increasingly determined by companies from the new economy.

Salesforce is a symbol of the steep rise in the industry over the past few years. Since the lows in the global financial crisis in 2008, the company's share price has increased roughly forty-fold. The group now brings it on the stock exchange to a value of almost 190 billion US dollars (160.59 billion euros) and is thus worth around ten billion more than Exxon Mobil. The share price of the oil giant, however, has almost halved since the end of 2008.

The change in the Dow will be implemented on August 31 prior to the start of trading. Then the pharmaceutical company Pfizer and the recently merged defense and aviation company Raytheon Technologies will have to give way. The biotech group Amgen and the conglomerate Honeywell will move up.

Too much emphasis on classic industry

Apple's stock split will also take place on August 31st. The group's shareholders receive three more for each paper. With such a step, companies want to make their shares cheaper again after strong price increases. Small investors in particular shy away from stocks that cost several hundred dollars or euros each. After an increase of more than 70 percent in the course of the year alone, the Apple price is now above the $ 500 mark. The course will be quartered by the split. Most recently, Apple distributed its value to more stocks by issuing additional paper in 2014. The company's market value recently passed the $ 2 trillion mark.

When calculating the Dow Jones Industrial, however, share prices play the most important role – market capitalization is not important. And with Apple's stock split, the price will fall, as the value of the company is spread over more papers. This would also reduce the importance of the tech industry, which is why the index provider S&P has now made improvements.

The importance of the current tech boom and the disadvantages of overweighting the classic industry for indices are shown by the developments of the Dow Jones and the tech value barometer Nasdaq 100. While the Dow 2020 is still slightly in the red, the Nasdaq 100 has the Corona -Crisis has long been ticked off and has long since reached a record high with a plus of 33 percent this year.