GameStop stock has had an impressive year, gaining almost 1,200% year-to-date and kicking off what has become a movement among retail investors. The stock has also reached a significant milestone that could qualify it to trade in the same index as some technology behemoths including Apple, Amazon, Facebook and even Tesla the Russell 1000.
GameStop needed to have a market cap of USD 5.2 billion as of May 7 to be eligible, a standard that it passed with flying colors. On that date, its value was roughly USD 12 billion. The Russell 1000 index is reportedly set to be reorganized on June 25. To be fair, GameStops weighting would likely be small in comparison to the tech giants.
Still, should GameStop gain entry into this popular index, it could provide some long-term stability to the stock price. That is because index funds are a popular choice in retirement accounts via ETFs or mutual funds. As a result, GME could become part of the portfolio of many future retirees who might otherwise not hopped on the meme-stock bandwagon.
When Tesla joined the Russell 1000 more than a decade ago, the stock was trading at less than USD 5 per share. Today the stock is trading at more than USD 616 per share. Thats not to say that the stocks bull run has been a function of its membership in the Russell index. But it is a good sign and an indication of how beneficial it can be to be part of the index club.
In addition, Tesla recently joined the S&P 500 index on Dec. 21, 2020. To join the S&P 500, a stock must boast a market cap of at least USD 11.8 billion as one of the criteria. GameStop meets that criteria with a market cap of more than USD 16 billion. Perhaps it wont be long before the market is talking about GME not only joining another Russell index (it currently trades in the smaller-cap Russell 2000) but also the benchmark U.S. stock market index, the S&P 500.
Meme stocks have proven to be some of the best bets of the year. Stocks like GameStop and AMC Entertainment have gone parabolic and gained comparisons to cryptocurrencies like bitcoin. On the commodities front, lumber has shed more than 40% of its value since hitting a multi-year high in early May. The gold price has managed to rise a modest 1.6% since then.
Story continues
GameStop shares are tacking on more than 1% today on the index chatter.
This article was originally posted on FX Empire
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GameStop Poised to Trade With Tech Giants in Russell 1000 - Yahoo Finance
