Workday (NASDAQ:WDAY) shares fell more than 5% Monday, trading close to the $275 per share mark after the company missed the cut to be included in the S&P 500.
S&P Dow Jones announced the quarterly rebalance of major indices, which takes effect on March 18. The constituent turnover impacts names such as BL, BOX, INTU, and WDAY.
Analysts noted Monday that BL and BOX both being added to the S&P SmallCap 600 index lifted their share prices.
"WDAY was viewed as a potential candidate for inclusion in the S&P 500, yet did not get the nod, and is subsequently down -4% after hours," said Citi.
"While we can appreciate the technical component of index inclusion driving forced buying and selling, given the structural decline of the index effect phenomenon over time, we may see a more muted impact for the new adds within our coverage – additionally, the lack of announced WDAY inclusion is likely a letdown but we could see it added in a future rebalance," the bank concluded.