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Post by xanet on Jun 11, 2018 12:59:05 GMT -5
Not really. I think being added back is good news insomuch as it forces some funds to buy (if only in a small way). But the Russell 3000 is an objective index. Presumably, Mannkind was dropped when it was ineligible (I don't recall why, maybe to do with share price pre-RS). Now it is being added back as it is eligible again, not because the market suddenly likes it or is noticing it except as a name on a list with 2999 other companies. "The Russell 3000 Index is a market-capitalization-weighted equity index maintained by the FTSE Russell that provides exposure to the entire U.S. stock market. The index tracks the performance of the 3,000 largest U.S.-traded stocks which represent about 98% of all U.S incorporated equity securities. ... Stocks in the Russell 3000 index is reconstituted once a year on the last Friday in June. At this time, all eligible securities are ranked by their current market capitalization." Read more: Russell 3000 Index www.investopedia.com/terms/r/russell_3000.asp"Stocks in the Russell 3000 index is reconstituted once a year on the last Friday in June. At this time, all eligible securities are ranked by their current market capitalization."
Does anyone have an offhand estimate of approximately what the threshold market cap might be? Is there any incentive for shorts to drive the PPS down so that MNKD's market cap is not in the top 3000 at the time the Russell 3000 is reconstituted?
Rankings are determined in May. A short attack would have to have been orchestrated on rank day, which is past. Price on the last Friday in June is irrelevant. Added source: Russell US Indexes
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Post by traderdennis on Jun 11, 2018 13:48:41 GMT -5
"Stocks in the Russell 3000 index is reconstituted once a year on the last Friday in June. At this time, all eligible securities are ranked by their current market capitalization."
Does anyone have an offhand estimate of approximately what the threshold market cap might be? Is there any incentive for shorts to drive the PPS down so that MNKD's market cap is not in the top 3000 at the time the Russell 3000 is reconstituted?
Rankings are determined in May. A short attack would have to have been orchestrated on rank day, which is past. Price on the last Friday in June is irrelevant. Added source: Russell US Indexes [ If a short was going to manipulate the market they would want mnkd in the Russell 3k and short after the announcement and again after the index is adjusted on June 22.
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Post by oldfishtowner on Jun 11, 2018 15:20:05 GMT -5
"Stocks in the Russell 3000 index is reconstituted once a year on the last Friday in June. At this time, all eligible securities are ranked by their current market capitalization."
Does anyone have an offhand estimate of approximately what the threshold market cap might be? Is there any incentive for shorts to drive the PPS down so that MNKD's market cap is not in the top 3000 at the time the Russell 3000 is reconstituted?
Rankings are determined in May. A short attack would have to have been orchestrated on rank day, which is past. Price on the last Friday in June is irrelevant. Added source: Russell US Indexes Thanks for the correction. I was confused by the reference to the additions list as being preliminary and interpreted the ranking on the last Friday in June as a final determination.
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Post by mnkdfann on Jun 11, 2018 22:23:21 GMT -5
If a short was going to manipulate the market they would want mnkd in the Russell 3k and short after the announcement and again after the index is adjusted on June 22. I must admit, I do not understand your thinking here. Are you suggesting the shorts would just short on any news that bumps the share price, expecting it to fall soon after (because they believe the share price pop is artificial and will not last)?
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Post by traderdennis on Jun 11, 2018 22:28:19 GMT -5
If a short was going to manipulate the market they would want mnkd in the Russell 3k and short after the announcement and again after the index is adjusted on June 22. I must admit, I do not understand your thinking here. Are you suggesting the shorts would just short on any news that bumps the share price, expecting it to fall soon after (because they believe the share price pop is artificial and will not last)? In hindsight it would be a very profitable strategy
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Post by mytakeonit on Jun 12, 2018 0:55:36 GMT -5
Good ... keep that thinking.
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Post by agedhippie on Jun 12, 2018 7:13:46 GMT -5
I must admit, I do not understand your thinking here. Are you suggesting the shorts would just short on any news that bumps the share price, expecting it to fall soon after (because they believe the share price pop is artificial and will not last)? In hindsight it would be a very profitable strategy There was an article in today's WSJ about that only with the SP500. They found that companies get a temporary bump off being listed but it soon disappears. The only way a rise remains is if it underpinned by increasing corporate finances (which you have to think would have pushed up the price regardless of listing).
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Post by xanet on Jun 12, 2018 11:34:15 GMT -5
Rankings are determined in May. A short attack would have to have been orchestrated on rank day, which is past. Price on the last Friday in June is irrelevant. Added source: Russell US Indexes Thanks for the correction. I was confused by the reference to the additions list as being preliminary and interpreted the ranking on the last Friday in June as a final determination. Yeah, it was really odd wording. The list is preliminary in the sense that things like mergers can change the final list. Otherwise, it is set on the rank day in May, which gives everyone a head's up on what the changes will be.
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Post by sportsrancho on Jun 17, 2018 7:36:04 GMT -5
Thanks for the correction. I was confused by the reference to the additions list as being preliminary and interpreted the ranking on the last Friday in June as a final determination. Yeah, it was really odd wording. The list is preliminary in the sense that things like mergers can change the final list. Otherwise, it is set on the rank day in May, which gives everyone a head's up on what the changes will be. Is there a minimum size position they need to take?
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Post by matt on Jun 17, 2018 7:51:27 GMT -5
Yeah, it was really odd wording. The list is preliminary in the sense that things like mergers can change the final list. Otherwise, it is set on the rank day in May, which gives everyone a head's up on what the changes will be. Is there a minimum size position they need to take? Yes, the minimum (and maximum) size they need to take is whatever percentage MNKD makes up in the index. Most stock indicies are quantity weighted so a stock with a $10 price and 2 million shares outstanding will be double the weight of a stock with the same $10 price but only 1 million shares. Index funds buy the index, exactly what is in the index, and nothing more. If MNKD represents 0.02% of the value of all companies in the Russell then the funds will put 0.02% of their assets in MNKD. The position is constantly tweaked as component prices move up and down, and as investor buy into or exit the fund, but whatever comprises the index is what the fund holds at the end of the day. Needless to say this is all computer driven trading because no human could tweak holdings for 3,000 stocks every trading session.
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Post by agedhippie on Jun 17, 2018 9:26:24 GMT -5
The other thing is that trackers lend out their shares. Since their holding is not discretionary they cannot sell they lend out their holdings to short. This is popular with the shorts because other than the stock falling out of the index the shares never get called back in any quantity. Trackers are allowed to do this although it deviates from the strict tracker principle because the income covers operating costs.
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Post by matt on Jun 17, 2018 10:32:54 GMT -5
Yes, index funds can and do lend shares as a way to supplement returns but that is something they need to do if the administrative costs are to be kept low. The index fund promises to deliver the exact return on the index minus their administration fee which can be as low as 8 basis points (8/100ths of 1 percent) on the amount invested, so the cost of running the operation has to come from somewhere. Most investors prefer lower fees and don't care about shorting of any particular stock since by buying an index they are betting on hundreds or thousands of stock.
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Post by Clement on Jun 17, 2018 12:39:18 GMT -5
It's good that MNKD is being added to Russell 3000 index. However, I calculate that less than $10k of MNKD will be purchased in total by Vanguard, iShares, and SPDR at the time of addition. Am I off base here?
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Post by casualinvestor on Jun 18, 2018 9:28:01 GMT -5
It's good that MNKD is being added to Russell 3000 index. However, I calculate that less than $10k of MNKD will be purchased in total by Vanguard, iShares, and SPDR at the time of addition. Am I off base here? Care to share your calculations? Going by iShares Russell 3000 (IVW) and looking up comparable sized companies, iShares will invest about $50K. What I can't guess at is how many more companies offer a Russell 3000 tracking fund that don't offer a Biotech tracker. But it looks like being added to the Russell 3000 will be a much smaller event than going back on the Biotech index. IBB shows it has $3M invested in MNKD
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Post by traderdennis on Jun 18, 2018 11:15:35 GMT -5
I could be wrong, from a quick glance, MNKD should also be added to the Russell 2000 list and to all of the trackers.
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