How are the Mighty Fallen

ftseThe FTSE 100 (Financial Times Stock Exchange) is an index of the value of the 100 largest companies on the London Stock Exchange measured by market capitalisation. It was created on 1st January 1984 with a value set at 1000 and recently it has been in the 6700 to 7000 range. Of the 100 companies which made up the first FTSE100 list fewer than 20 remain on it today. A similar story of high turnover happens in the USA. In the 1920s the average age of the companies listed on the S&P 500 was 67 years! Today it is 14.

Here is the list of the original 100 companies in the FTSE 100 in 1984.  It is interesting to read the list and ask what has happened to the giants of yesteryear.  Three have gone bankrupt – British & Commonwealth Shipping, Ferranti and MFI Furniture.  Many have sunk into obscurity.  General Electric Co, the powerful electronics and defence conglomerate assembled in the Sixties by Arnold Weinstock, was rebranded as Marconi, then brought low after some terrible choices by its leaders. ICI, Imperial Chemical Industries, was a tower of British success but was split up and sold off.  Pilkington Brothers, the plate-glass innovators are now a division of Nippon Sheet Glass.

Over half have been acquired.  Some have survived and prospered including Barclays, BAT, Unilever and Marks and Spencer.  New entrants include some high tech and media companies such as ARM, Sky, Vodafone and WPP.

The longevity of public companies is diminishing.  Technology, innovation, fashion and competition have all accelerated.  Mighty companies with great reputations and strong balance sheets fall victims to the march of markets.  Consider GEC, Kodak or Nokia.  The changing face of the FTSE 100 list reflects the changing face of our economy as innovation destroys long-standing incumbents and elevates smart upstarts.  How many of today’s giants will still be around in 10 years or 20?

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