Annual Changes to the Nasdaq-100 Index, New Index Share Product on the
Nasdaq-100 Index
WASHINGTON, Dec. 14 /PRNewswire/ -- Effective with the market open on December
21, 1998, the components and weightings of Nasdaq-100 Index(R) will change.
In addition to the annual re-ranking, this year's changes will, for the first
time, include a re-balancing of the Index. Essentially, the Index will change
from being a market-capitalization weighted index to a modified market-
capitalization weighted index ("Adjusted Index").
The following issues will be added to the Nasdaq-100 Index: Amazon.com, Inc.
(AMZN); Intuit Inc. (INTU); NTL Incorporated (NTLI); VERITAS Software
Corporation (VRTS); Vitesse Semiconductor Corporation (VTSS); Lincare
Holdings, Inc. (LNCR); McLeodUSA Incorporated (MCLD); Dollar Tree Stores, Inc.
(DLTR); and Comair Holdings, Inc. (COMR).
Amazon.com, Inc., is an Internet book and music retailer. It opened its
virtual doors on the World Wide Web in July 1995. Today, Amazon.com
offers more than 3 million books, music CDs, audiobooks, videos, DVDs,
computer games and other titles. The Seattle, Washington firm had a market
capitalization of $6.6 billion at the time of selection.
Intuit, Inc., is a financial software and Web-based services company.
Intuit develops and markets Quicken (www.quicken.com), TurboTax and
Quickbooks. The Mountain View, California company had a market
capitalization of $3 billion at the time of selection.
NTL Incorporated offers local business and residential telephony,
residential cable television and Internet services over advanced broadband
fiber networks in the United Kingdom. The New York firm had a market
capitalization of $2.8 billion at the time of selection.
VERITAS Software Corporation designs, develops and markets enterprise
storage management and high availability software products that manage
both on-line and off-line data for business-critical computing systems.
The Mountain View, California company had a market capitalization of $2.3
billion at the time of selection.
Vitesse Semiconductor Corporation designs, develops, manufactures and
markets high bandwidth communications and Automatic Test Equipment
integrated circuits. The Camarillo, California firm had a market
capitalization of $2.3 billion at the time of selection.
Lincare Holdings, Inc., is a provider of oxygen and other respiratory
therapy services to patients in the home. The Clearwater, Florida company
had a market capitalization of $2.3 billion at the time of selection.
McLeodUSA Incorporated is a provider of integrated telecommunications
services to business and residential customers. The Cedar Rapids, Iowa
firm had a market capitalization of $2.3 billion at the time of selection.
Dollar Tree Stores, Inc., is a discount variety store chain offering a
wide assortment of everyday general merchandise at the one dollar price
point. The Chesapeake, Virginia company had a market capitalization of
2.2 billion at the time of selection.
Comair Holdings, Inc., is the holding company of COMAIR, Inc., an
independently-owned regional airline that serves more than 80 cities in 28
states and three countries. The company, headquartered at the
Cincinnati/Northern Kentucky International Airport, had a market
capitalization of $2.1 billion at the time of selection.
These component adjustments ensure that the Index represents the largest and
most active non-financial domestic and international issues listed on The
Nasdaq Stock Market(R) and improve the Index's value as a hedging device.
Annual adjustments were first implemented in 1993 when Nasdaq-100 Index
options began trading on the Chicago Board Options Exchange under the symbol
"NDX." In April 1996, Nasdaq-100 futures and options on futures began trading
on the Chicago Mercantile Exchange under the ticker "ND."
All securities in the Index are among the top 150 eligible securities based on
closing prices as of October 30, 1998 and the available total shares
outstanding as of December 1, 1998. Nasdaq-100 issues ranked 101 through 150
in market value will be replaced by larger eligible securities unless the
security was in the top 100 eligible securities during the previous year's
ranking. Eligibility criteria for the Index includes a minimum average daily
trading volume of 100,000 shares. Generally, companies also must have
seasoned on Nasdaq or another major exchange, which means they have been
listed for a minimum of two years. If the security is a foreign security, the
company must have a world wide market value of at least $10 billion, a U.S.
market value of at least $4 billion, and average trading volume of at least
200,000 shares per day. In addition, foreign securities must be eligible for
listed-options trading.
In the first quarter of 1999, The Nasdaq-Amex Market Group(SM) expects to
introduce an innovative new Index Share product based on the Nasdaq-100 Index,
enabling investors to make a single investment in the Nasdaq-100 companies as
a whole.(1) The product will be similar to Standard & Poor's Depositary
Receipts(R) (SPDRS(R)), the Dow Industrials(SM) (DIAMONDS(SM)) and the World
Equity Benchmark Shares(SM) (WEBS(TM)) in that it will act like a mutual fund,
but trade like a stock on the floor of the American Stock Exchange. Investors
who purchase shares of Nasdaq-100 will actually be buying into a trust which
holds a portfolio consisting of Nasdaq-100 securities.
In preparation for the launch of the new Index Share product, effective
December 21, 1998, the Nasdaq-100 Index will be calculated based upon a
modified capitalization weighted methodology. Such re-weighting will provide
enhanced diversification of the underlying securities basket and result in a
better representation of The Nasdaq Stock Market as a whole. To accomplish
this, Nasdaq(R) will review the composition of the Nasdaq-100 Index on a
quarterly basis, beginning in December 1998, and will adjust the weightings of
Index components using a proprietary algorithm whenever: (1) Any individual
component securities represents more than 24 percent of the total market
value of the Index; and/or (2) The combined weight of all securities having
individual weightings of at least 4.5 percent exceeds 48 percent of the total
market value of the Index. Once the Index has been initially adjusted, it
will be subsequently readjusted only if the Index weights exceed the 24
percent and/or 48 percent thresholds.
The precise post-diversification weightings of component securities in the
Index will be determined based upon closing prices on December 10. The
aggregate weight of the five largest stocks in the Index, approximately 61
percent, will be scaled down to 40 percent. Weightings of all Index
securities will be reset by reducing or enlarging such weights toward 1.0
percent, the average weight. The value of the adjusted index will continue to
be disseminated under the current symbol NDX.
As a result of the addition of the companies above to the Nasdaq-100 Index,
the following companies will be removed: ADTRAN, Inc. (ADTN); Dura
Pharmaceutical, Inc. (DURA); General Nutrition Companies, Inc. (GNCI); Oxford
Health Plans, Inc. (OXHP); PairGain Technologies, Inc. (PAIR); PhyCor, Inc.
(PHYC); Sybase, Inc. (SYBS); U.S. Office Products Company (OFIS); and
Wisconsin Central Transportation Corporation (WCLX).
The Nasdaq-100 Index, launched in January 1985, has risen more than 24 percent
from January 1, 1998, through November 30, 1998, although past performance is
not necessarily indicative of future performance. The Nasdaq- Amex Market
Group, which operates The Nasdaq Stock Market and the American Stock
Exchange(R), is a subsidiary of the National Association of Securities
Dealers, Inc. (NASD(R)), the largest securities-industry, self-regulatory
organization in the United States. The union of Nasdaq(R) and Amex(R) creates
the world's first financial market that brings together central auction
specialist and multiple Market Maker systems.
The Nasdaq Stock Market lists nearly 5,200 companies and trades more shares
per day than any other major U.S. market. Since making its debut as the
world's first electronic stock market, Nasdaq has been at the forefront of
innovation, using technology to bring millions of investors together with the
world's leading companies. It is among the world's best regulated stock
markets, employing the industry's most sophisticated surveillance systems and
regulatory specialists to protect investors and provide a fair and competitive
trading environment.
The Amex has a significant presence in both listed equities and equity
derivative securities. It trades options on 30 broad-based and sector indexes
and 1,060 domestic and foreign stocks, as well as Long-term Equity
AnticiPation Securities(R) (LEAPS(R)) on 1,050 stocks. Amex is a leader in
listing warrants on foreign currencies and indexes, hybrid instruments and
other structured products.
For a more detailed description of the re-weighting, visit the Nasdaq-100 News
Menu at nasdaqtrader.com. For more information about Nasdaq- Amex,
visit the Nasdaq-Amex Web site at nasdaq-amex.com or the Nasdaq-
Amex Newsroom(SM) at nasdaq-amexnews.com.
(1) A registration statement relating to these securities has been filed with
the Securities and Exchange Commission but has not yet become effective. These
securities may not be sold nor may offers to buy be accepted prior to the time
the registration statement becomes effective. This press release shall not
constitute an offer to sell or the solicitation of an offer to buy nor shall
there be any sale of these securities in any State in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such State. Complete information about
shares based on the Nasdaq-100 Index, including charges and expenses, will be
contained in a prospectus which, when available may be obtained from John L.
Jacobs, The Nasdaq-Amex Group, 1735 K Street, NW, Washington, D.C. 20006.
SOURCE The Nasdaq Stock Market, Inc.
CO: Nasdaq Stock Market, Inc.
ST: District of Columbia
IN:
SU:
12/14/98 10:46 EST prnewswire.com |
