The widening gulf between the interests of Silicon Valley and Wall Street closed a bit today: In a long anticipated move, Apple, the world’s most valuable company, will join the Dow Jones Industrial Average later this month. The Wall Street Journal reports that the Cupertino-based technology company will replace telecom giant AT&T in the index as it reshuffles “pending a 4-for-1 stock split by Dow component Visa Inc.” The change will take place on March 18.
The addition of Apple to the Dow Jones—a move some would say is overdue—cements the tech industry’s place in the 119-year-old blue-chip index. So why the delay? “The DJIA is price-weighted so extremely high stock prices tend to distort the index while very low stock prices have little impact,” David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, wrote in a press release.
Apple’s 7-for-1 stock split last summer brought the stock price down closer to the median price in the Dow. (For the past few months, Apple shares have been trading in the lower-to-mid hundred-dollar range). Visa, meanwhile—which is for some reason classified as an information-technology company—will split its shares around the same time Apple joins the Dow, diluting its share prices. The Dow’s concern was that prior to the Visa split, the index would be unfairly weighted toward technology companies. Apple today is trading on NASDAQ for $128.83 (up 1.92%) with a market cap of $750 billion.
For what it’s worth, Silicon Valley might not even care: