Facebook Awaits Index 'Like'
Investors hoping that index funds will give Facebook Inc.'s battered shares a lift could be in for a long wait.</br></br>When the Nasdaq Stock Market decided in April to shorten the "seasoning" period for any stock to three months from as little as a year, it made the social-networking company, which went public in May, eligible for inclusion in its Nasdaq-100 index as soon as Sept. 1.</br></br>Changes to indexes, known as "rebalancing," are closely followed by traders, as additions mean that mutual funds and exchange-traded funds that explicitly replicate them are forced to buy the stock, regardless of its performance. Many funds that are benchmarked against an index buy as well.</br></br>But any uplift from joining the Nasdaq-100, which includes Internet and technology giants such as Apple Inc., Google Inc. and Baidu Inc., is likely to be months away. Although Facebook's stock-market value, at $52 billion, should easily qualify it as one of the 100 largest Nasdaq-listed companies, the index is only reranked each December.</br></br>Surprise additions do happen--but it is only when a company leaves the index because it falls below listings requirements, seeks bankruptcy protection or is acquired, that unscheduled changes are made.