Burberry is set to be dropped from the FTSE 100 — the index of the top 100 listed companies in the UK by market value.
👉 Background: Burberry is the British luxury fashion brand that was founded in the 1850s and listed on the stock market in 2005. Over the past few years, Burberry has been struggling with weak demand, and its share price has dropped over 76% since April last year.
👉 What happened: Burberry is set to be dropped from the FTSE 100. The FTSE100 is an index of the top 100 listed companies in the UK by market value.
👉 What else: Burberry’s been on that list for 15 years consecutively, but now, its market capitalisation has dropped too low to keep it in the list. And the consequences of this are going to be more than just symbolic.
💡Falling off the index ladder can often mean more tumbling down the market.
💡When a company is included on an index like the FTSE100 or the ASX200, it gains more than just the title. It also gains access to a new form of investors and investment funds — think ETFs and mutual funds, which often track major indexes and hold the stocks in them.
💡When Burberry is dropped from the FTSE100, it has more to lose still. Investment funds may sell off their shares to keep in alignment with the index. This could push Burberry’s already damaged share price down further.
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