We knew that some exceptions were being made with respect to listing requirements, but the extent of firms that could be facing delisting (though it is discretionary for the S&P 500) is presently alarming. Consider:

In the table below, we summarize the number of stocks in each sector that currently do not meet the $3 bln market cap threshold to be eligible for inclusion in the S&P 500. In the Consumer Discretionary sector, over 40% of the stocks currently have market caps of less than $3 bln. For the index as a whole, nearly 27% of the stocks that are currently in the index would not be eligible for inclusion if they were being considered today. Fortunately for them, S&P doesn’t automatically kick companies out of the index when they fall below the market cap threshold. And since there aren’t many companies outside of the index that could replace the ones that no longer would qualify, the only thing S&P can really do is lower the requirements.

The S&P 500′s Incredibly Shrinking Market Cap [Bespoke Investment Group] via Abnormal Returns