Why Webjet (ASX:WEB) got kicked out of ASX All Tech index

The online travel agency will no longer be in the group of elite Australian technology companies. Did it shrink, or was it another reason?

| More on:
asx share price resignation represented by man kicking miniature man through the air

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Webjet Limited (ASX: WEB) will be removed from the S&P ASX All Technology Index (ASX: XTX) on 22 March.

This means that a business with a $2.1 billion market capitalisation will be missing from the most prominent index of Australian technology companies.

Webjet has been a success story in the local tech scene. The online travel agency was founded in 1998 then reverse listed on the ASX two years later.

The Webjet share price hovered around the 10 cent mark in mid-2005. But it spiked up to about $3.50 by 2013 as Australians started abandoning physical travel agents and embraced the lower prices from online merchants.

As that trend continued in the 2010s, Webjet's valuation kept growing. The share price well surpassed the $12 mark in both 2018 and 2019, and the company now commands 50% of the online travel agency flights market in Australia and New Zealand.

But of course, COVID-19 brought the entire travel industry to a standstill last year. 

Webjet shares suffered a low of $2.25 during the 2020 market crash but have since recovered nicely to trade at $6.18 by close of trade Wednesday.

Goldman Sachs on Wednesday put a "buy" rating on the stock and slapped a price target of $7.36 on it, which is a 19% premium to the current cost.

So why is it getting kicked out of the All Tech index?

The reason Webjet was removed from the All Tech index

A spokesperson for S&P Dow Jones Indices, which operates the All Tech index, told The Motley Fool that Webjet's industry classification will be changed.

"The global industry classification standard of WEB will be changed from '25502020 (Internet & Direct Marketing Retail)' to '25301020 (Hotels, Resorts & Cruise Lines)' effective on 22 March, 2021."

This has led to Webjet's exclusion, as the All Tech index doesn't include the 'Hotels, Resorts & Cruise Lines' industry.

Webjet declined to comment to The Motley Fool on the reclassification.

The All Tech index encompasses the following industries:

  • Information technology
  • Consumer electronics
  • Internet & direct marketing retail
  • Healthcare technology
  • Interactive media & services

Webjet's fate means that index funds that follow the All Tech will be forced to sell out of the business in the coming days. The impact of that sell-off on the share price is yet to be seen.

The Webjet share price was down 0.32% on Wednesday, while it has risen slightly since the index removal was revealed after Friday's trading session.

Should you invest $1,000 in Coles Group Limited right now?

Before you buy Coles Group Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Coles Group Limited wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Tony Yoo owns shares of Webjet Ltd. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Travel Shares

a young woman looks at here phone as she strides out in an airport dragging her wheelie bag behind her and smiling widely.
Travel Shares

Would I buy Qantas shares right now?

This ASX travel share has flown higher. Is it a buy?

Read more »

a woman drawing image on wall of big fish about to eat a small fish
Mergers & Acquisitions

Guess which ASX All Ords stock just received a takeover offer

A private equity firm has its eyes on this stock.

Read more »

A woman reaches her arms to the sky as a plane flies overhead at sunset.
Travel Shares

Qantas shares just hit $10. Can they fly higher?

Will Qantas shares reach a new all-time high in 2025?

Read more »

A corporate-looking woman looks at her mobile phone as she pulls along her suitcase in another hand while walking through an airport terminal with high glass panelled walls.
Travel Shares

After lowering its guidance, what's Macquarie's price target on Corporate Travel Management shares?

What does this broker have to say about the travel company?

Read more »

Man sitting in a plane seat works on his laptop.
Travel Shares

Why did the Qantas share price lose altitude in April?

Qantas shares didn’t join in April’s ASX 200 rebound. But why?

Read more »

Man waiting for his flight and looking at his phone.
Travel Shares

Corporate Travel shares crash 11% as Trump tariffs bite

Trump’s tariffs are roiling Corporate Travel shares on Friday.

Read more »

A family walks along the tarmac towards a plane representing more people travelling as ASX travel shares recover
Travel Shares

How lower interest rates could send this beaten down ASX All Ords stock flying

A leading expert says this sold-off ASX All Ords stock is ‘well placed for growth’.

Read more »

Woman on a tablet waiting in for her flight in an airport and looking through a window.
Travel Shares

After a guidance downgrade, what does Macquarie think Flight Centre shares are worth?

Is this stock great value after its downgrade?

Read more »