GE Vernova, Solventum slated to join S&P 500 index next week

GE Vernova, Solventum to join benchmark S&P 500 index

Newly established GE Vernova and Solventum Corp., both on the brink of being spun off from their parent companies, are making significant strides early on.

Both companies are slated to join the U.S. benchmark S&P 500 index next week.

GE Vernova is poised to become an independent renewable-power-generation company following next week’s split of General Electric into two different firms, GE Aerospace and GE Vernova, while Solventum is set to emerge as the standalone entity from 3M's healthcare division — a move also set to complete next week.

S&P Dow Jones Indices announced late Wednesday that Solventum would be included in the S&P 500 index effective Monday's market open, in place of V.F. Corp., a producer of apparel and sportswear brands such as JanSport, The North Face, and Timberland. Meanwhile, 3M will maintain its position in both the S&P 500 and the S&P 100.

VF Corp. moving to S&P SmallCap 600 Index

V.F. Corp. is slated to transition to the S&P SmallCap 600 at the start of trading on Wednesday, April 3, as it no longer accurately reflects the large-cap market landscape, according to S&P Dow Jones.

On Tuesday's market open, GE Vernova will be incorporated into the S&P 500, supplanting Dentsply Sirona Inc. Dentsply Sirona, a manufacturer of dental products, will join the S&P MidCap 400 at the start of trading on April 3, having received similar classification concerns.

General Electric, set to transform into GE Aerospace, will retain its positions in both the S&P 500 and the S&P 100.

Recent headline-worthy moves within the S&P 500 and the Dow Jones Industrial Average — both leading U.S. stock market benchmarks — include the addition of Amazon.com to the DJIA index last month as well as the inclusion of Kenvue, a spinoff of Johnson & Johnson, into the S&P 500 index in August.

GE Vernova soars on first day of trading

GE Vernova recently made its debut on the New York Stock Exchange (NYSE) — the company’s shares opened at $115 on Wednesday, according to NYSE data cited by Barron’s.

The stock shot up 14% from opening levels to close at $131.25.

Vernova’s early success also pushed up shares of General Electric.

GE Vernova is the soon-to-be spun-off power generation business of General Electric. The spin will be completed on April 2, and the Vernova shares, which have the stock symbol “GEV”, began trading Wednesday on a when-issued basis.

At the time of writing on Thursday, GE Vernova was trading close to 17% higher in premarket hours at $134.53.

Solventum stock, which also trades on a when-issued basis, was last up close to 2% in premarket at $76.44.

What is when-issued trading?

Shares of companies that are about to be spun off sometimes enter trading before they are officially delivered into brokerage accounts — a practice known as when-issued trading. Although trading volumes are typically modest, these early transactions provide investors with an initial insight into the valuation.

On Wednesday, just shy of five million shares of GE Vernova were exchanged, representing approximately $645 million in transactions — a “significant volume for a when-issued stock,” according to Barron’s correspondent Al Root. Vernova's market capitalization stands at around $36 billion. Investors traded nearly 2% of the company’s market value on the first day alone.

According to Root, the initial prices suggest that Wall Street accurately gauged the starting price, although determining this figure for a when-issued stock may have relied on Street estimates.

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