Dow Jones Cuts Longest Serving Exxon Mobil Corp From Industrial Average

MIDLAND, TX – In its largest restructuring in seven years, the Dow Jones Industrial Average will be removing one of its longest-serving members Exxon Mobil Corp on Monday.

Removing Exxon from the index was prompted by an expected stock split by Apple, which is set to happen at Friday’s market close which will ultimately leave the company's stock sitting at one-quarter of its current value.

Unlike the market-cap-weighted S&P 500 index, the Dow weighs its members by individual price rather than the proposed market value, and if a stock’s price falls too much it could leave devastating impacts on the 124-year old index.

In a release S&P Dow Jones Indices said, “They also help diversify the index by removing overlap between companies of similar scope and adding new types of businesses that better reflect the American economy.”

To offset this loss in market value the blue-chip Dow will be replacing Exxon Mobil's stock with a cloud-based software company called Salesforce, which was Founded in 1999, and according to Bloomberg,  has seen a rise in the company's stock of 27-fold since March of 2009.

Energy giant Exxon Mobil, the oldest member of the index originally joined the Dow in 1928 as Standard Oil of New Jersey.

While Exxon Mobil was previously given a market value of $450 billion in 2014, the company's stock has fallen substantially throughout the last six years, and is down an additional 40 percent since January of this year.

Accompanied by the COVID-19 lockdowns, technology companies across the nation have surged this year. In July, Amazon founder and CEO Jeff Bezos saw his net worth grow by $13 billion in just one day.

Also leaving the index effective Monday is drug company Pfizer and airplane and defense contractor Raytheon Technologies, which will be replaced by biotech company Amgen and manufacturing conglomerate Honeywell.

The last time three companies were simultaneously added to the Dow was back in 2013, when Visa Inc., Goldman Sachs Group Inc., and Nike Inc. replaced Bank of America Corp., Hewlett-Packard Co., and Alcoa Inc.

Although the Dow’s influence among the marketplace has faded over the last few years it remains a high profile equity gauge with nearly $31.5 billion listed in total assets.