Slashdot Mirror

← Back to Stories (view on slashdot.org)

Apple Too Big For the Dow Jones Industrial Average

Posted by samzenpus on from the we're-gonna-need-a-bigger-stock-ticker dept.

An anonymous reader writes "Apple is clearly the hottest tech stock on the market right now and the company is clearly at the vanguard of technological innovation. Consequently, many have wondered why Apple isn't part of the Dow Jones Industrial Average (DJIA). As it turns out, Apple's astronomical share price effectively prohibits the company from joining the DJIA as it would disproportionately influence the index."

2 of 218 comments (clear)

  1. DOJA != DJIA by spazdor · · Score: 5, Informative

    Dow Jones Industrial Average (DOJA)

    Reasonably sure that no one in the world abbreviates it like that. In fact, Googling "dow jones" and "doja" together, brings up... This exact news story. And no others.

    --
    DRM: Terminator crops for your mind!
  2. DJIA is by Z8 · · Score: 5, Informative

    The Dow Jones is an older index in which each company's weight in the index is determined by its stock price. In more recent indicies like the S&P500, stocks are weighted by market capitalization. Assigning weights by stock price is silly because it makes no intuitive sense and means extra work is needed to prevent events like stock splits from moving the index around.

    So anyway, this isn't really about Apple, it's just a technical detail about a legacy index. Apple's share price is high ($412 as I type this), but so are plenty of other companies like Google ($539) and Berkshire Hathaway ($101250!).