Peugeot's woes worsen, company to be delisted from CAC 40 stock index

After 25 years and having been a member since the CAC 40's inception in 1987, on September 24, French carmaker Peugeot will be officially delisted from France's benchmark stock index. The CAC 40 is a collection of the 40 companies with the "most significant values" among the top 100 firms by market capitalizations listed on Euronext Paris (the French stock market). Peugeot has been struggling, and that's putting it kindly. With a first-half loss this year of €819 million ($1.047B U.S.), its stock is enduring near-26-year lows, having lost more than 60 percent of its value over the past year alone. In fact, its market cap has lost about €400 million ($511M U.S.) in just the three weeks since speculation of its delisting was first reported. The CAC 40, on the other hand, has risen by 11 percent over the past year.
According to Bloomberg, Peugeot has declined to comment on the situation. The assessment of most commentators is that, beyond the blow to prestige and the heightened impression that Peugeot's ship is listing further, this can only make things worse, since it could push Pug stock out of index-tracking and exchange-traded funds. Ominously, the trend is for stocks to underperform the index by roughly 15 percent after being delisted. A potential bright side, according to one analyst, however, is that being out of the spotlight could help relieve Peugeot stock of short-selling pressures.

The carmaker's place will, as expected, be taken by Belgian chemical company Solvay. Peugeot stock will move to a different index, the CAC Next 20, where Solvay is currently listed.