POSSIBLE RETURN OF GAMESTOP IN THE S&P 500 INDEX

Standard & Poor’s 500 index popularly known as S&P 500 index is an index in the US stock market that consists of the 500 largest quoted companies by market capitalization in the US. That’s companies whose shares are publicly traded in the stock market. This index is one of the highest tracked indexes in the world.

For a company to be deemed eligible to be included in the index, they are required to meet some minimum requirements, some of which are; be highly liquid, has a market capitalization of at least $13.8 billion, public float of at least 10% of its shares, most recent quarters’ earnings must be positive and the sum of the four preceding quarters.

GameStop is an American company that deals in video games, gaming merchandise retailing, and consumer electronics.  Gamestop was dropped from the S&P 500 index in 2016. As of the close of the market on Wednesday, September 1, 2021, Gamestop had a market capitalization of $15.841 billion which is above the minimum capitalization required to be eligible for inclusion in the S&P 500 index. Gamestop is highly liquid based on the number of its shares traded in the last six months.

However, Gamestop reported a loss for the first quarter in 2021, as well as the first three quarters in the preceding year. The loss recorded for these quarters makes the company fall short of one of the requirements needed to be eligible to be in the S&P 500 index.

Committee members of the S&P 500 will most likely want to see if Gamestop can maintain some of the minimum requirements it has met, before considering the inclusion of the stock in the S&P 500 index.

S&P 500 index is seen by the investment community as the best index to track the performance of large-cap US companies and the state of the US economy.

As of the close of market on Wednesday, September 1, 2021, Gamestop stock closed at $212.97 per share, the stock 52-week high price stands at $483.00 per share, and a 52-week low of $5.87 per share. The current shares price represents a 44.09% downturn from its 52-week high.