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Technology Stocks : The New QLogic (ANCR)

QLGC 16.07

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Aug 24 5:00 PM EST

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To: George Dawson who wrote (21739)	5/13/1999 1:31:00 AM
From: Alan Bershtein	Read Replies (1) of 29386

Breifing.com has an interesting piece titled “Getting the Jump on the Russell 2000 Reconstruction” Some excerpts… The Russell 2000 index is reconstructed every year, in June. A preliminary list of the stocks likely to be added, and likely to be dropped, is published in the second week of June. The interesting thing about the reconstruction is that stocks which are added to the list, at the bottom, often show a sharp jump in price in the weeks ahead of the reconstruction. Why is the Russell reconstruction important? There is approximately $120 billion currently invested in index funds that mimic the Russell indexes. As soon as new components of the Russell indexes are published, these funds will start dumping the stocks which are dropped, and buying the stocks which are added. Who are possible additions? We currently estimate the "cut-off" at just about the same as last year's cutoff, at about $175 million in market capitalization. Companies that have risen from below $171 million to higher than $200 million in market capitalization are almost certain to be added to the index. End of pasting ANCR's current market cap is 173 million. If the facts in the Breifing piece are accurate, then our favorite little stock from Minnetonka is on the bubble for being added to the Russell. I'd love to see it! …Just some food for thought. George, I tip my proverbial cap in appreciation for your coverage of the annual meeting. Thank you.

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