2014.06.1023:52:25UTC+00Dow Jones inclusion possible with Apple stock split

For many speculators, Apple’s announcement from late April of a seven for one split of their shares, which came into effect early this week, is a signifier of their intent to be included in the Dow Jones Industrial Average.

The Dow Jones, an index that tracks 30 of the top blue chip companies listed in the US market, is different from its peers by its method of listing stocks according to the weight of its price instead of their market value. The average price of those included is $87.83 falling far below that of Apple’s, the largest company on the market in terms of stock market value, making it an obstacle preventing Apple’s entry.

After the split’s coming in effect on Monday, however, share prices for Apple were adjusted to $92, more than enough to both be considered for inclusion in of the Dow Jones and  also attract more investors by decreasing the price. The split meant that those who were already holding shares in the company found themselves with an additional six shares to maintain their overall investment value.

Even so, an additional hurdle still exists before Apple can be added in to the index since the Dow Jones maintains only 30 stocks in its list, meaning one of its current members must first be booted out. Candidates for replacement include some of its worst performing stocks in IBM and the recently added Goldman Sachs.

In the last 12 months, IBM has dropped 9.2%, the steepest in the group, while Goldman Sachs notched had a loss of 0.9%. They own the second and third heaviest weights, respectively, on the Dow consequently dragging it down.

September last year  was the last time the Dow made modifications in its members when it included Goldman Sachs, Visa, and Nike at the expense of shedding off Bank of America, Hewlett-Packard, and Alcoa.