Hewlett-Packard may still pull more than a hundred billion dollars a year through the door, but that's no longer enough for the company to win a place on the Dow Jones Industrial Average, (DJIA) the venerable and prestigious basket of 30 stocks held to represent a vital sample of American listed companies.
HP's removal from the list, according to the Dow's canned statement, came because of its low share price and “the Index Committee’s desire to diversify the sector and industry group representation of the Index.”
Removal from the index won't harm HP materially, because financial types don't place great store in the DJIA. The index's wider prestige, however, is such that being excluded is the kind of milestone the company could do without. Throw in the fact that the Dow's decision to boot three companies (Bank of America and Alcoa also got the chop) constitutes its biggest turnover in a decade and HP's exclusion looks even more momentous.
The there's the fact that Microsoft, Intel and Cisco remain all members, and that payments firm Visa has been named as HP's direct replacement. All constitutes further kicks in the relevance to HP.
The news isn't all bad: the likes of Google and Oracle aren't DJIA members, although one reason for their exclusion is that their share prices are so high it would make it hard to balance the index.
At the time of writing HP's investor relations unit was silent on its exclusion, which takes place on September 23rd. ®