The fact that the COVID-19 pandemic has had a devastating effect on the world economy is in front of everyone. What may not be is that the automotive industry was already struggling for a multitude of reasons. The pandemic has just made it worse. While Harley-Davidson was already navigating some rough seas over the past year or so, they are up against a giant rogue wave. The company will be removed from the S&P 500 list effective 22nd of June.



S&P 500 is a key index for a clear picture on the state of American Business landscape. A pointer that is used to determine the current status of business and economy in America. It gets its name because it measures the stock performance of 500 big companies that are listed on stock exchanges in the United States.

Being included in the list is a matter of prestige and good performance of the company. Harley-Davidson has been a part of the S&p 500 for a while but their removal from the same is surely going to be a blow. A blow over the already struggling state that the company has found itself in the recent past.

As we mentioned, it is a point of prestige for a company to be a part of the list, being removed from the list is going to result in a hit to Harley-Davidson stock. That, in turn, may complicate the financial struggles of the company as well. The reason for the hit on the stock price is that certain investment funds can only invest in S&P 500 companies, usually as a means of managing risk.

While the removal of Harley-Davidson from the S&P 500 list may cause a dip in the stock price, the removal of the company from the list is a result of the dip in the stock price. Their correlation is a cycle in which the Milwaukee brand finds itself stuck in i.e. the performance of the company in the recent past led to the declining stock price, which led to the removal of the company from the list, in turn, leading to a further hit on the stock prices.

Currently, Harley-Davidson has a market cap of $3.89 billion, well off the $8.2 billion that is required for a brand to be listed on the S&P 500 index. With S&P moving Harley-Davidson to its S&P MidCap 400, this move seems to confirm the notion that Harley-Davidson is no longer considered a large-capitalization firm worthy of the S&P 500 designation.

Ther current scenario and developments surely entail the vision of a difficult future for 100+ years old company.

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