Bombardier Inc. is on the verge of being delisted from two key indices.
The Canadian manufacturer of aircraft and trains is close to being kicked off the S&P/TSX Composite Index and the S&P/TSX 60 Index of large companies. Bombardier’s share price has been below $1 since March, making it ineligible to stay on the two indices.
To be included in the S&P/TSX Composite Index, a company must have a minimum volume-weighted average stock price of $1 over three consecutive months, as well as over the last 10 trading days of the month prior to the index provider’s quarterly review. Bombardier’s average share price stood at 53 Canadian cents for the three months leading up to June.
A delisting could further hurt demand for Bombardier’s shares as exchange-traded funds would likely also drop the stock from their portfolios.
S&P Dow Jones Indices releases its quarterly review within the first ten days of the rebalancing month, which would be June 12. Bombardier’s stock has lost almost all of its value over the past 20 years. The company’s market capitalization peaked at $36.2 billion in the summer of 2000. Today its market cap stands at just $1.4 billion.
Bombardier used to be one of Canada’s biggest companies and made everything from snowmobiles to commercial aircraft but is now a shadow of its former self after ceding its marquee jet program to Airbus SE and agreeing to sell its rail business to French train maker Alstom SA in the face of more than $10 billion of debt.
Last week, Bombardier announced that it plans to eliminate 2,500 jobs at its aviation division following a slump in demand for business aircraft.