Key insights
- Everspin Technologies (MRAM) is set to be added to the Russell index, prompting questions about its market impact. While historically index additions guaranteed a stock pop due to ETF rebalancing, the author questions if this effect is now priced in by front-runners. The market will observe whether the inclusion leads to a significant volume spike followed by a sell-off, or if the new institutional ownership provides a solid floor for the stock, especially given its current all-time low price.
Hey guys,
I've been looking closely at MRAM for a while now. It’s a pretty solid company with good fundamentals, and it feels like it's sitting at a really good price point right now.
They are officially getting added to the Russell index on the 26th. I know back in the day this used to guarantee a nice pop because all the passive ETFs were forced to buy in, but I'm wondering how this actually plays out in today's market.
Is the inclusion mostly priced in by front-runners and hedge funds by the time the actual date rolls around? Should I expect a massive volume spike and then a dump next week once the forced buying is over, or does the new institutional ownership actually help set a solid floor for the stock?
Just trying to figure out if I should pull the trigger now or wait to see how the dust settles after the reconstitution. Anyone have experience playing these index additions?
Just wondering as it's at an all time low atm so i dunno