Why Emergent BioSolutions Stock Is Tumbling Today

Shares of Emergent BioSolutions (NYSE: EBS) were tumbling 10.6% lower as of 11:29 a.m. ET on Tuesday. The decline came after S Global's S Dow Jones Indices announced that Advance Auto Parts will replace Emergent BioSolutions in the S SmallCap 600 index.

S Dow Jones Indices said that the change will be effective before the market opens on Friday, Aug. 25. The company's reason for the replacement was that "Emergent BioSolutions is no longer representative of the small-cap market space" while Avance Auto Parts is.

Any exchange-traded funds (ETFs) or mutual funds that track the S SmallCap 600 will sell their positions in Emergent BioSolutions and buy shares of Advance Auto Parts. Such moves can cause downward pressure on Emergent's share price. But getting booted from the S SmallCap 600 is more of a result of Emergent BioSolutions' woes than a cause of them.

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Source Fool.com