Russell indexes to add 39 IPOs on March 31

Quarterly additions enhance market representation of index

TACOMA, Wash. — Thirty-nine recent initial public offerings (IPOs) will appear in the broad-market Russell 3000Ò Index after the close of the U.S. equity markets on March 31. Four of these IPOs—Celanese Corporation, Dolby Laboratories, Inc., Huntsman Corp., and Las Vegas Sands Corp.—also will jump directly to the large-cap Russell 1000Ò Index. The others, including Comstock Homebuilding and Great Wolf Resorts, Inc., will join the small-cap Russell 2000Ò Index.

The list of IPOs set for addition to Russell indexes includes nine firms in the Financial Services sector and six in the Health Care sector. The largest four IPOs, though, come from the Consumer Discretionary and Materials Processing sectors.

Russell weights index members by their float-adjusted market cap and explicitly excludes "locked-up" shares from IPO weights. For example, this quarter’s 39 additions have an average of 71% float-adjusted shares due to lock-up agreements and/or ownership stakes that prevent these shares from being available to the broader market.

Russell announced in August that its family of U.S. indexes will add IPOs on a quarterly basis in order to enhance how well each index reflects its segment of the U.S. equity market. The firm added 48 IPOs at the end of the third quarter, including Google and Freescale Semiconductor Group, and 40 IPOs at the end of the fourth quarter, including Dreamworks Animation.

The quarterly IPO additions process works as follows:

· On the quarterly "market snapshot" date, which was Feb. 28 this quarter, Russell checks all recent IPOs to see how the stock’s market cap ranks on that date relative to the market-adjusted market cap breaks established at the latest reconstitution.

· A list of IPOs that qualify for inclusion in Russell indexes is announced publicly the following month, following the schedule posted on

· Any IPO which has a market cap that justifies inclusion in an index, and which meets Russell’s other membership rules, is added to the appropriate indexes after the U.S. equity markets close on scheduled date, which is March 31 this quarter.

To be eligible for inclusion, the IPO date would need to fall within the three-month period prior to the "rank" date. As IPOs are added to Russell indexes each quarter, Russell will not delete existing index members to make room for them, but will continue to reconstitute the indexes fully each year at the end of the second quarter.

As a result of the annual reconstitution process in 2004, Russell added 100 IPOs to its family of U.S. equity indexes, while only 28 IPOs were added in 2003. The record was set in 2000 when 320 IPOs moved into Russell indexes.

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