Reddit Favorite Nokia Is Getting Booted From a Leading Europe Stock Market Index
The Finnish telecom equipment maker has been pushed out of a leading stock market index in Europe.
Markku Ulander /Lehtikuva/AFP via Getty Images
Nokia may be the one European company that is popular on the Reddit WallStreetBets message board, but that hasn’t prevented the Finnish telecom equipment maker from being pushed out of a leading stock market index in Europe.
Nokia will be replaced by German chip maker Infineon Technologies from the Euro Stoxx 50, effective Mar. 22, index provider Stoxx announced. The Euro Stoxx 50 is one of the most popular European indexes, used by options, futures and exchange-traded funds to track European stock performance.
Nokia shares have gained 7% this year, but have slipped 1% over the last 52 weeks. Infineon Technologies, by contrast, has surged 14% this year and 89% over the last 52 weeks, giving it a market capitalization of around €47 billion, compared with Nokia’s €19 billion. Microchip makers have rallied due to strong stay-at-home demand as well as a shortage of supplies, particularly for chips used by automobile makers.
It was a case of unfortunate timing for Nokia, which jumped some 30% over a three-day stretch in mid-January in what appeared to be a Reddit-driven frenzy. But that spike dissipated.
The issue of how retail mania intersects with index construction is one that is confronting fund managers in deciding whether to buy videogames retailer GameStop for their portfolios. Index provider Russell revamps its indexes in June, a process that starts in May, and GameStop could graduate from the smaller Russell 2000 into the larger-cap Russell 1000, as Barron’s explained in an earlier article.