The half-yearly ASX300 rebalance announcement will be in late...

The half-yearly ASX300 rebalance announcement will be in late March (19 or 26 Mar). As it stands, there are about 20 current ASX300 stocks with market caps below $500m (including 9 below $400m).

Until yesterday, TLG had been sitting at $500m or more for the past 3 months. Market cap isn't the only criterion for joining the ASX300, so I'm not sure if TLG meets the other criteria as well as MC.

I was holding two stocks (EOS PAR) when they both joined the ASX300 in late June 2020. Being added to an index obviously has some positive in that index funds must include those stocks in their holding & therefore there is some enhanced buying in the lead-up to the announcement & just after.

However, what is also apparent is that joining those indices "allows" some institution via their constitutions to consider shorting these stocks - because they can & I wouldn't of course call it "manipulation"! Shorting on EOS subsequently lifted from under 1% to as high as 6.4% four months later, PAR not as dramatic, lifting from around 3% to as high as 4.6%. It is clear from the shorting graphs (refer shortman.com.au) that the ASX300 addition was a trigger for "enhanced" shorting.

So, TLG may be a candidate to join the ASX300 in about 8 weeks. Further erosion of the market cap from here won't help. And then IF it joins the ASX300, there some positives & definitely some negatives. This may be a bit of a wildcard over the next 3-4 months.