Silicon Valley pioneer Hewlett-Packard has suffered its share of indignities in recent years – first losing its ranking as the world’s biggest tech company in overall sales, when it was passed by Apple and Samsung, before losing its crown to Lenovo as the world’s leading PC-maker earlier this year. Now it’s being dropped from the Dow Jones Industrial Average.
HP will be replaced by Visa on the venerable 30-stock index, starting Sept. 23, according to an announcement Tuesday from S&P Dow Jones Indices, which owns the rights to the list. The move is part of a much larger shake-up on the Dow, with Nike replacing Alcoa and Goldman Sachs replacing Bank of America, as well.
“The index changes were prompted by the low stock price of the three companies slated for removal and the Index Committee’s desire to diversify the sector and industry group representation of the Index,” according to a statement released by the Dow’s overseers.
That’s kind of ironic, since HP’s stock has seen a bit of a resurgence in recent months, as CEO Meg Whitman has been trying to lead the company through a major turnaround effort. HP shares are up more than 50 percent since the start of the year, trading Tuesday at a little over $22. But that’s still far down from early 2010, when the stock was trading at just under $54.
Analysts say the change probably won’t affect HP’s stock much; it’s still part of the larger S&P 500 index. The Dow index, meanwhile, has four other tech giants on its roster: Intel, Cisco, Microsoft and IBM.
Apple and Google have both been considered for inclusion, but the index overseers reportedly passed on both because their stock prices are so high that they might distort the rest of the index.
(Photo of HP logo sign courtesy of HP)