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Question for Wallstreet

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Posts: 8

pezeveng

Veteran

Joined: Dec, 2004

Posts: 4711

Posted: Feb. 26, 2012 - 3:10 PM ET #1

When the facebook ipo starts does this automatically move the S and P 500 up?

Lets say its at 1365 the day the IPO comes out that adds 50 billion in value how much does it go up?

wallstreetcappers

Covers Linesmen

Joined: Feb, 2003

Posts: 58464

Posted: Feb. 26, 2012 - 5:38 PM ET #2

First the company has to be added to the index and that usually does not happen initially.

But once it does happen you just find its overall weighting in the index and calculate that percentage and see what it does to the index.

What you are saying in numbers is right, the value of the company in MINUS the value of the company out will weight the index accordingly.

The S&P when they add one, they take out another.

mainmanmainman2

Veteran

Joined: Feb, 2011

Posts: 4357

Posted: Feb. 26, 2012 - 6:20 PM ET #3

it will be listed on the nyse? am i wrong?

wallstreetcappers

Covers Linesmen

Joined: Feb, 2003

Posts: 58464

Posted: Feb. 26, 2012 - 6:21 PM ET #4

I havent found that out, but the NYSE or the NAZ it doesnt matter regarding the S&P since the S&P is market value rated basket irregardless of what exchange the stock is listed and trading on.

mainmanmainman2

Veteran

Joined: Feb, 2011

Posts: 4357

Posted: Feb. 26, 2012 - 6:22 PM ET #5

whats your take on AA alcoa?

pezeveng

Veteran

Joined: Dec, 2004

Posts: 4711

Posted: Feb. 26, 2012 - 7:10 PM ET #6

thanks ws.

I have a friend who's heavy into the s and p minis and wondering what affect FB would have.

So it takes a few days I am guessing or longer? $50 billion has to drive it up regardless who's coming out.

wallstreetcappers

Covers Linesmen

Joined: Feb, 2003

Posts: 58464

Posted: Feb. 26, 2012 - 7:32 PM ET #7

I think it will take a few months or longer...they evaluate on a regular basis but to make a move quickly isnt too likely if you ask me.

I think the S&P likes to see stability and predictability before making a move too.

WallStreet21

Prospect

Joined: Mar, 2012

Posts: 76

Posted: Apr. 5, 2012 - 9:13 AM ET #8

Agreed with WS

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