Apple Weighting Slashed in Dramatic Nasdaq Retooling

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Apple’s heady days as one of the Nasdaq’s ruling indexes may be over–for the moment, anyway.

The world’s largest electronics trading market, Nasdaq OMX, announced plans to cut Apple’s weighting in a massive rebalancing of its indexes on May 2.

Rebalancing’s relatively rare, but not unheard of for a capitalization-weighed index (weighted according to the total market value of outstanding shares). It’s the focus on Apple that makes this one notable. Apple currently accounts for over 20 percent of the index, but the rebalancing will drop that dramatically to about 12 percent. An arbitrary eight point drop on Nasdaq’s 100-point scale is pretty much titanic.

The Wall Street Journal says the rebalancing is Nasdaq’s reaction to the spike in Apple shares, up “more than fourfold” over the last two years. We all know why, right? That little trick they’ve managed putting an ‘i’ before ‘phone’, ‘pad’, and ‘rule-the-universe’?

Reuters reports the announcement’s already disturbing the market: Apple shares were down 1.5 percent in premarket trading, while shares of Microsoft–set to gain nearly 5 percent on Nasdaq’s rebalancing–rose 1.6 percent. The move reportedly has investors scrambling to tweak portfolios, so expect some market volatility in the days and weeks ahead.

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