Investing

FTSE Russell Rebalance Act for 2019 Is Huge for Recent Post-IPO Stocks

EverQuote Inc. (NASDAQ: EVER) was last seen trading up 4% at $12.61, but its 52-week range is $4.09 to $22.09. The online auto insurance marketplace runner’s IPO from June of 2018 was at $18, above the $15 to $17 range. Its market cap is $321.6 million.

Lyft Inc. (NASDAQ: LYFT) priced its IPO in late March of 2019 at $72 and ended up trading as high as $78.29 on the first day’s close. It then tanked as the economics of ride-hailing became more clear, but the shares have since recovered. Lyft was trading at $63.50, in a post-IPO range of $47.17 to $88.60, and it has a market cap of $18.5 billion.

MongoDB Inc. (NASDAQ: MDB) had seen shares surge and surge after earnings beats, but at $154 now it has backed off handily from the highs. Its 52-week range is $47.69 to $184.78, and the easy-to-use and affordable database platform operation saw its shares pop 30% in the $24 per share IPO from October of 2017. MongoDB has a market cap of $8.8 billion.

PagerDuty Inc. (NYSE: PD) was trading at $47.30, and it has a post-IPO trading range of $36.00 to $59.82. The on-call management platform priced its IPO in April of 2018 at $24 per share but hasn’t ever traded down close to the IPO price. It has a market cap of $3.7 billion.

Spotify Technology S.A. (NYSE: SPOT) was a direct-to-market IPO rather than the traditional model. It has been public since April of 2018, with a debut of close to $165 and a first day close of $149.01. Now its shares are closer to $144, in a 52-week range of $103.29 to $198.99. Spotify is eligible for inclusion in the Russell US Indexes as it meets the free float requirement. The online music streaming leader has a market cap of $26.9 billion.

Uber Technologies Inc. (NYSE: UBER) had to temper its IPO price due to Lyft’s debut and due to the market being spooked that profits may (or are likely to) never arrive any time soon. Uber was last seen trading near $43, and its 2019 IPO was at $45. It traded near $42 its first day. The ride-hailing leader has a market cap of $72.7 billion.

Catherine Yoshimoto, director of Product Management for FTSE Russell, recently talked up the opportunity for IPOs being included in the indexes:

For newly public companies, meeting requirements for inclusion in the Russell US Indexes is considered a very important step. Entering the Russell US Indexes means that a company is recognized by the leading US equity benchmarks followed by approximately $9 trillion in passive and actively managed investment assets. Congratulations to all the new companies, both large and small, expected to enter the Russell US Indexes at this year’s rebalance.

Some other big changes are happening within the primary Russell indexes in the June rebalances. According to the FTSE Russell website, Microsoft Corp. (NASDAQ: MSFT) is unseating Apple Inc. (NASDAQ: AAPL) as the top index stock, removing Apple’s number-one position held since 2012. Apple is also falling behind Amazon.com Inc. (NASDAQ: AMZN), which will make Apple the third highest stock by weighting in the main Russell indexes. Berkshire Hathaway Inc. (NYSE: BRK-A) is expected to shift from 13% Growth and 87% Value to 100% Value and leave the Russell 1000 Growth Index.