Since passive funds mostly weigh investment by market cap or some other indicator of size that’s already gotten smaller for these firms I’m not sure swapping ou

Since passive funds mostly weigh investment by market cap or some other indicator of size that’s already gotten smaller for these firms I’m not sure swapping out the smallest 30 would make up more than a few percent of allocated funds.. far from drastic for the passive investor. From the firm perspective it’s also hard to quantify the effect on stock prices from dropped firms when the reason they’re being dropped is their market cap shrunk— there’s a chicken vs egg quality to the situation. Obviously some institutions will be forced to sell but the market is generally efficient in the long run— it’s not like getting dropped affects the underlying business value. In the short term the businesses will have less access to newly issued equity capital however.