The S&P 500 is usually considered the best measure of how the American economy is doing. The index includes companies like Chevron, Microsoft, and JPMorgan Chase, companies worth billions that are intended to be representative of the American economy. The S&P 500 also includes Harley-Davidson, though not for much longer.
On Friday, S&P Dow Jones Indices announced that it was booting Harley and two others from the list, effective June 22. It was doing so, it said, “ensure each index more appropriately represents its market capitalization range,” which is a nice way of saying that Harley simply isn’t a big enough player anymore to be placed alongside America’s biggest corporations.
Harley will now be listed in the S&P Midcap 400, alongside companies like Dick’s Sporting Goods, Papa John’s, and Gamestop. Harley’s current value is a little under $4 billion, and one requirement to get into the S&P 500 in the first place is to be worth more than double that.
This is all mostly a shot at Harley’s pride, as being among the S&P 500 doesn’t confer companies with any special privileges, it’s more just that a committee of people thinks your company is big enough to be there, which Harley, these days, simply isn’t.
For Harley’s new CEO Jochen Zeitz, that, going forward, is somewhat by design, as Zeitz plans to refocus the company on its core customer base, which are Americans who buy heavy motorcycles. Harley under Zeitz also wants to trade on exclusivity again, both positions running opposite to the goals of Zeitz’s predecessor, Matt Levatich, who thought Harley could go bigger globally.
Zeitz also won’t care much about being in the S&P 500 at the end of the day, since a job well done for him mostly means boosting Harley’s stock price and its profitability. For enthusiasts, a job well done will mostly be keeping Harley alive, period.