Nasdaq adds Moderna to 100 index, triggering ETF purchases
Nasdaq Inc. added Moderna to the Nasdaq-100 index earlier this month. The index tracks the 100 largest non-financial listings on the Nasdaq Stock Market. This inclusion requires exchange-traded fund managers to purchase Moderna stock to mirror the index's performance. The Invesco QQQ Trust, for example, now holds approximately $2 billion in Moderna shares. This amount represents more than 2% of the company's $94 billion market capitalization. Institutional ownership of Moderna shares stands at about 80%. The shift of shares from individual investors to institutional holders reduces the supply available to the public market. This dynamic can make the stock more expensive for ordinary investors to acquire. The index addition does not change Moderna's underlying fiscal performance. However, it increases visibility among investors and mandates buying by passive funds. The company's stock price rose 700% this year, a run-up that qualified it for the index. This gain was driven by several factors, including the August FDA approval of an updated COVID-19 vaccine and the recent approval of a flu vaccine. Investors are also focused on Moderna's cancer vaccine candidate, intismeran autogene. Early this year, phase 3 trial results showed impressive efficacy when intismeran autogene was combined with Merck's Keytruda for certain types of melanoma. These developments, along with the index inclusion, have shaped investor sentiment toward the stock.
Nasdaq Inc. added Moderna to the Nasdaq-100 index earlier this month. The index tracks the 100 largest non-financial listings on the Nasdaq Stock Market. This inclusion requires exchange-traded fund managers to purchase Moderna stock to mirror the index's performance. The Invesco QQQ Trust, for example, now holds approximately $2 billion in Moderna shares. This amount represents more than 2% of the company's $94 billion market capitalization. Institutional ownership of Moderna shares stands at about 80%. The shift of shares from individual investors to institutional holders reduces the supply available to the public market. This dynamic can make the stock more expensive for ordinary investors to acquire. The index addition does not change Moderna's underlying fiscal performance. However, it increases visibility among investors and mandates buying by passive funds. The company's stock price rose 700% this year, a run-up that qualified it for the index. This gain was driven by several factors, including the August FDA approval of an updated COVID-19 vaccine and the recent approval of a flu vaccine. Investors are also focused on Moderna's cancer vaccine candidate, intismeran autogene. Early this year, phase 3 trial results showed impressive efficacy when intismeran autogene was combined with Merck's Keytruda for certain types of melanoma. These developments, along with the index inclusion, have shaped investor sentiment toward the stock.