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Technology Stocks : JDS Uniphase (JDSU)

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To: Bill Holtzman who wrote (13164)	10/21/2000 5:55:15 PM
From: t2	Read Replies (1) of 24042

If the merger closes before year end, then when the S&P 500 is reweighted JDSU market cap will be considerably higher and therefore all index funds will be required to buy significantly more. Absolutely. The timing of the change is a bit uncertain. I don't know if the quarterly S and P 500 rebalancing have cut off dates to be effective. For example the September rebalancing was announced mid September---so if a deal closes late September, it would not make the cutoff. Furthermore, there is a possibility that they may be working about 1 or more months behind---ie the Sept rebalancing could be taking only deals completed by August 30 or something like that. I am wondering if someone knows how this works. I thought that one of the reasons JDSU/SDLI were lagging lately was that too many funds have both SDLI and JDSU and would not be adding more because it would lead to overconcentration in one stock. However, the rebalancing would take care of that in a big way. IMHO, it would translate into another S and P 500 addition type of scenario---a big move---as I think overconcentrated funds have probably already trimmed their positions, expecting the deal to close.

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