Shares of Under Armor were largely unchanged on Monday on their first day of trading after the S&P Dow Jones Indices announced plans to remove the Baltimore-based sportswear maker from the widely followed S&P 500 stock index.
Under Armor will be removed from the index before the start of trading on June 21 and will be added to the S&P MidCap 400, the S&P Dow Jones announced on Friday. The S&P 500 tracks the performance of 500 major companies listed on US stock exchanges.
The changes are being made to “ensure that each index is more representative of its market capitalization range,” S&P Dow Jones said in a statement.
“All companies moving from the S&P 500 to the S&P MidCap 400 are more representative of the mid-cap market space, and all companies moving from the S&P MidCap 400 to the S&P SmallCap 600 are more representative of the small-cap market space “, says the announcement.
Market capitalization is the total market value of the outstanding shares of a listed company. Under Armor’s market capitalization is approximately $4.86 billion.
Under Armor shares have lost nearly half their value this year, but rose a nickel on Monday to $11.05 apiece.
The retailer posted a quarterly loss on May 6 and missed revenue projections amid an ongoing supply chain and pandemic-related challenges. The financial performance sent the company’s share price plummeting, losing about a third of its value, and leaving some analysts questioning management’s ability.
Less than two weeks later, the brand announced the departure of CEO Patrik Frisk on June 1 after just over two years at the helm. Frisk, who also served as chairman, engineered the company’s recently completed multi-year turnaround. Under Armor’s board of directors has launched an internal and external search for a new president and chief executive officer, with chief operating officer Colin Browne assuming the role on an interim basis.
Under Armor will be replaced in the S&P 500 by Keurig Dr Pepper Inc., while IPG Photonics Corp., also downgraded, will be replaced by ON Semiconductor Corp.
Under Armor and IPG Photonics will replace Trinity Industries Inc. and Yelp Inc., respectively, in the S&P MidCap 400. Another clothing retailer, Urban Outfitters Inc., is also downgraded as part of the announced changes from the S&P MidCap 400 to the S&P SmallCap. 600.