Fingerprint Set to Fall Out of Benchmark Index as Volume Slumps
(Bloomberg) -- Fingerprint Cards AB is set to be removed from Sweden’s large-cap index after turnover in its stock plummeted as the maker of biometric sensors fends with a slump in sales and profitability.
The OMX Stockholm 30 Index includes the 30 most traded Swedish stocks in terms of turnover and is reviewed twice a year, in January and July. When deciding on its composition, Nasdaq Stockholm examines turnover in the six months through May, and excludes any stock ranked outside the top 45. Fingerprint Cards is currently in 47th place, when calculating the average daily turnover in the past six months.
The average number of Fingerprint shares traded each month fell to 87 million shares in April, the lowest since April 2015. Since it was included in the index in January 2016, its average monthly volume was 207 million shares.
That development and a share price that has slumped more than 60 percent since early December have taken a toll on daily turnover, which has dropped to an average of 86.5 million kronor ($10 million) during the past six months, from almost 300 million kronor in the second half of 2017.
Being dropped from the OMX Stockholm 30 Index would mark the next chapter in Fingerprint’s fall from grace and may further hurt trading volume and its attractiveness as an investment. The stock, which has had somewhat of a cult following in Sweden, made it into the benchmark group after a spectacular share price performance in 2015, when it jumped more than 1,500 percent buoyed by hype surrounding biometric sensors and its leading market position.
But as it faced growing competition and pricing pressure for sensors for mobile phones as well as weakening demand and inventory build-up among customers, the company issued five profit or sales warnings in the 15 months through January and scrapped its dividend, which sent shares plummeting.
Fingerprint’s market capitalization now stands at just 1.96 billion kronor, a far cry from 42.7 billion kronor at the peak in late 2015.
Nasdaq Stockholm declined to comment on the index composition, but is likely to announce any changes in early June. The new index starts applying from July 2. The stock exchange’s next review will be announced in December and apply from January.
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