The S&P 500 Index (SNPINDEX:GSPC) includes 500 of the biggest companies in the U.S. market. But for various reasons, some large companies have gotten left out of the benchmark index. Let’s look at four of the largest ones and try to figure out whether Standard & Poor’s will remedy their omission in the near future.
Facebook Inc (NASDAQ:FB)
With a market capitalization of more than $65 billion, Facebook Inc (NASDAQ:FB) erupted onto the public markets last year to great fanfare and even greater disappointment. Yet despite the social-media giant’s woes, the company has been slowly getting itself onto some major market benchmarks, most notably the Nasdaq 100 index.
For Facebook to get into the S&P, current standards require that the company be “seasoned for six to 12 months.” With the company coming up on its one-year IPO anniversary, Facebook should expect to be in investors’ index portfolios in the very near future.
Las Vegas Sands Corp. (NYSE:LVS)
As a worldwide casino gaming giant, Las Vegas Sands Corp. (NYSE:LVS) has a $46 billion market cap, which would easily be enough to put it into the top 100 companies, let alone the top 500. But during the 2008 market meltdown, the stock traded as low as $1.38 per share, bringing its market cap down to small-cap territory.
Another key reason Las Vegas Sands Corp. (NYSE:LVS) hasn’t regained admittance to the S&P 500 probably has to do with CEO Sheldon Adelson’s substantial insider stake in the company. S&P prefers that companies have ample shares constituting the public float in order to meet index-fund demand, and with less than half of its outstanding shares actually available for trade, Las Vegas Sands Corp. (NYSE:LVS) may get left off the benchmark index for a while unless Adelson decides to divest himself of his big holdings.
General Motors Company (NYSE:GM)
General Motors Company (NYSE:GM)’s bankruptcy in 2009 resulted in a huge reorganization that included having the U.S. Treasury hold a substantial stake in the automaker’s new stock. Although the Treasury has made some sales of stock, it still owns nearly $8 billion in General Motors Company (NYSE:GM) — not quite a fifth of the automaker’s overall market cap. Other parties to the bankruptcy proceeding, including auto unions, also hold big share positions.