Reddit favorite Nokia is launched from a major European stock market index
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The Finnish telecom equipment manufacturer was ousted from a leading stock market index in Europe.
Markku Ulander/Lehtikuva/AFP via Getty Images
nokia
may be the only popular European company on the Reddit WallStreetBets forum, but that hasn’t stopped the Finnish telecom equipment maker from being kicked out of a top European stock index.
nokia
will be replaced by German chip maker
Infineon Technologies
of the Euro Stoxx 50, starting March 22, announced the Stoxx index provider. the
Euro Stoxx 50
is one of the most popular European indices, used by options, futures and exchange-traded funds to track the performance of European stocks.
Nokia shares have gained 7% this year, but have slipped 1% in the past 52 weeks.
Infineon
,
by contrast, has jumped 14% this year and 89% in the past 52 weeks, giving it a market cap of around 47 billion euros, compared to Nokia’s 19 billion euros. Microchip makers rebounded due to strong at-home demand as well as a supply shortage, particularly for chips used by automakers.
It was a case of unfortunate timing for Nokia, which jumped around 30% over a three-day period in mid-January in what appeared to be a Reddit-fueled frenzy. But this peak has dissipated.
The question of how retail mania intersects with index construction is one that fund managers face when deciding whether or not to buy a video game retailer.
GameStop
for their wallets. Index provider Russell revamps its indices in June, a process that begins in May, and
GameStop
could move from the smaller Russell 2000 to the larger-cap Russell 1000, as Barrons explained in a previous article.
