Arik Hesseldahl

Recent Posts by Arik Hesseldahl

Look Who’s Taking Dell’s Spot on the S&P 500

Now that computing giant Dell is days away from closing the $25 billion deal that will lead to its becoming a privately held company, there’s some change coming to the various stock indices of which it has been a member for several years.

The big change is to the closely watched Standard & Poor’s 500. Dell shares will drop off that index after the close of trading on Oct. 28, and will be replaced by shares of the Swiss oil-drilling company Transocean. That’s the company that owned and operated the Deepwater Horizon oil rig that exploded and caused the huge oil spill in the Gulf of Mexico in 2010.

The announcement from the S&P Dow Jones unit of the McGraw-Hill Companies doesn’t mention how long Dell has been a component of the index, so I did some digging through the archives and found an old story from Dow Jones Newswires covering its ascension to the benchmark index.

Here’s what I found: Dell joined the S&P 500 about 17 years ago, on Sept. 5, 1996. It replaced Varity Corp., a farm-equipment company that had been bought out in a merger. Dell had already been a member of the S&P MidCap 400, and when it left that index, it was replaced by PMI Group, a mortgage insurance company.

Dell is in the process of being bought out by its founder and CEO, Michael Dell, and private equity firm Silver Lake Partners. The deal was approved by shareholders last month, after a prolonged fight with activist investor Carl Icahn for control of the company.

Dell’s leaving the index is perhaps another sign of the times and the shifting priorities in personal technology. Earlier this year, chipmaker Advanced Micro Devices was deleted from the S&P 500. And before that, Dell rival Hewlett-Packard was bumped off the list of 30 stocks that make up the Dow Jones Industrial Average. HP, however, remains on the S&P 500.

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