Russell Deletion- Last week Before the Drop Begins
On June 14 the stock will be delisted from the Russell which will cause a large number of shares to be sold. While the long term outlook of the stock is very good the short term is very uncertain. If you look at the charts from 2010 & 2011 when the stock was added and dropped from the Russell in the year it was dropped stock price fell 40% after May and when it was expected to be added stock price rose by roughly that amount. With short interest increasing and millions of shares to be sold a buying opportunity is coming. We could easily see $1 again very soon.
Largest Projected Names to Sell by Share Quantity
Ticker Shares Market Value Move AVG Trade Volume Days to Sell
URZ Energy (4,998,192) (5,298,084) Russ 2000 to Delete 272,685 (18.33)
CPST Industrials (22,616,953) (20,959,131) Russ 2000 to Delete 1,400,265 (16.15)
What happened to URZ last year, when it was removed from the Russell 2000 Index?
While reviewing past (Amex/TSX: URZ) Uranerz Energy news releases I noticed that on June 14, 2010 Uranerz Energy was identified as a potential deletion from the Russell family of indexes. At that time Uranerz Energy was included in the Russell 3000 Index, the Russell 2000 Index, the Russell Microcap Index, and the Russell Global Index.
The URZ chart below indicates a decline of 41.83%, from $1.59 on May 3, 2010 to $0.91 on July 8, 2010. The Simple Moving Average SMA blue line and the Volume-Plus chart confirm a downtrend with URZ closing lower on about three times as many days as it closed up.
Notice how URZ's trading volume started building from the middle of June last year, around when they announced the company may be deleted from the Russell Indexes. Normal URZ volume this time last year was a few hundred thousand shares daily, but on June 25, 2010 the volume spiked to 4-million shares on this URZ down Friday.
Russell finalized the reconstitution of their indexes after the market closed on that day and Uranerz Energy was deleted from the Russell 2000 Index.
Q: What's the basic process?
A: On the last trading day in May (this year May 31), all eligible securities globally are ranked by their total market capitalization. Companies whose stocks are listed on eligible stock exchanges in eligible countries and who pass minimum liquidity and other investability rules are considered for inclusion in the indexes. Beginning on June 14, preliminary lists for the additions and deletions to the indexes are communicated to the marketplace. These changes go into effect after the close on Friday, June 28. All Russell indexes are subindexes of the Global Index.
Thanks for this info psheftic.. have tried to find info about this with no success.. where did you get this info? Also looking at the chart during June 2011 when the company announced inclusion in the Russell there does not seem to be much if any effect on the share price.. TIA