Wow. The government takeover sure has been a rousing success, hasn’t it?
Two companies that have received billions of dollars in aid from the U.S. government have been kicked out of the Dow Jones industrial average (INDU).
According to a statement released Monday, General Motors, which filed for bankruptcy on Monday, will be replaced by Cisco Systems (CSCO, Fortune 500); Citigroup (C, Fortune 500) will be replaced by The Travelers Companies (TRV, Fortune 500).
The changes in the Dow will go into effect on on June 8, according to Dow Jones.
……GM stock plunged to 75 cents per share on Friday, its lowest level since the Great Depression. Shares of Citigroup dipped below $1 per share in early March but were trading above $3 on Monday.
General Motors became ineligible for inclusion in the benchmark indicator when it filed for Chapter 11 bankruptcy protection Monday.
“The parlous state of GM has left us with no choice but to remove it from The Dow,” said Robert Thomson, managing editor of The Wall Street Journal and editor-in-chief for all of Dow Jones, in a written statement. “A bankruptcy filing immediately disqualifies a stock regardless of a company’s history or its role as a cultural icon.”
……”We were reluctant to remove Citigroup at the height of the financial frenzy, but it is clear that the bank is in the midst of a substantial restructuring which will see the government with a large and ongoing stake,” said Thomson.
GM and Citigroup, just two of the government’s newly acquired assets, are now so worthless that the Dow has declared them persona non grata.
How’s that ‘change’ working out for you?