Free float: a key factor in stock indices

  • Shares held in lock-up (referring to IPO lock-up shares)
  • Institutional investors
  • Shares held by governments (directly/indirectly)
  • Shares held by sovereign wealth funds, etc.
  • The investors, especially institutional investors, suffer large losses, as their portfolios are benchmarked to that index. Their positions are being squared off based on such announcements.
  • Overall, it impacts the business of the index provider, as the accuracy of its index and research is questioned by the investors.

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Acuity Knowledge Partners

Acuity Knowledge Partners

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We write about financial industry trends, the impact of regulatory changes and opinions on industry inflection points. https://www.acuitykp.com/