Exxon abandons the Dow Jones Industrial Average

Spending 92 years doing anything is an accomplishment, so congratulations to Exxon Mobil Corp., who spent more than nine decades as a member of the Dow Jones Industrial Average, plundering the planet, lying about climate change and enriching it even more. the rich.

Now those days are over. One of the largest oil companies on the planet has bleeding money this year, and now it’s been booted from the Dow Jones because it’s just not the superpower it once was. I almost feel bad for Big Oil these days. Almost.

News of Exxon’s withdrawal from the Dow Jones comes amid a pandemic that has absolutely crushed oil. We have seen almost all the major oil players turn to layoffs, panicking about collapsing demand, and note their value while small businesses default on loans or go bankrupt. The oil industry as we know it is going through a fundamentally unprecedented crisis, and the launch of Exxon as one of the classic stock market benchmarks is another sign of upheaval.

The Dow Jones Industrial Average is supposed to reflect stocks that are doing as well as the US economy as a whole. With that in mind, it’s no surprise that it has been powered by fossil fuels since its inception. The 12 original companies of the Dow Jones when it was founded in 1896 included utilities like Laclede Gas, Chicago Gas, and the opaque-named North American Company as well as the Tennessee Coal, Iron, and Railroad Company. Better-known companies like Exxon and Chevron, as well as forerunners like Standard Oil and Texaco, have also made appearances.

But Exxon has been the most venerable, which makes his fall off par so shocking. The company was the oldest company until Monday’s announcement it would get the start up at the end of this month. The immediate driving force was Apple’s division of its stock after becoming the first U.S. company to spend $ 2,000 billion in market value. If you’re the type who smells or finds them interesting, you can read all about Apple’s stock division in more detail. here, but for our purposes, suffice it to note that this affected the weight of tech stocks in the Dow Jones Industrial Average. To solve this problem, it shook the listed companies, pushing Exxon over the edge as well as Pfizer and Raytheon. He also added Salesforce, pharmaceutical company Amgen and conglomerate Honeywell.

The fall of Exxon perfectly mirrors the rise of Apple. At one point, Exxon was in Apple’s position as the most valuable US company. Exxon was valued at $ 400 billion in 2011; CNBC said in 2008 it hit this value because it was a “safe haven” and “not going anywhere”. Fast forward 12 years, and it’s clear Exxon is anything but.

The pandemic has reduced demand for oil, showing that oil is going somewhere and has not increased. The economic collapse also exposed the wobbly financial house of cards that underlies fossil fuels, particularly fracking. But even before that, oil was starting to drop: Exxon’s market value had recently declined to $ 175 billion, according to Axes, although it is not the only oil giant not to live up to high financial expectations.

A growing number of large banks have withdrawn from financing Oil exploration in the Arctic. The tar sands have become less and less profitable. If you’re investing in, uh, investing, oil and gas isn’t a super wise place to put your money.

If you’re the type to invest in a habitable planet for future generations, the arguments against fossil fuels are also pretty clear. More carbon pollution from oil and gas is just not something we can live with, a case activists have championed for years. While the transition was already underway before 2020, the pandemic accelerated it.

None of this is to say that Exxon is officially made for or that it still doesn’t wield tremendous power. A company worth $ 175 billion with its tentacles hanging over the Republican Party is still a formidable enemy. But it shows that another world is possible. Fingers crossed, the Dow Jones can get Chevron out of there then.