Originally published on DropThe.org.
Only 53 of the Original 500 Are Still There. The Rest Were Replaced.
When the S&P 500 launched in 1957, it included 500 of the largest companies in America. Sixty-nine years later, only 53 of them are still on the list. The other 447 were acquired, went bankrupt, or shrank into irrelevance.
That is a 90% replacement rate for the most elite companies in the country. And the churn is accelerating.
The Index Replaces Itself Every 15 to 20 Years
Between 1963 and 2014, the S&P 500 swapped out 1,186 companies. That is an average of 23 replacements per year. The annual turnover rate sits at 4.4%, according to S&P Dow Jones Indices.
But the rate is not constant. It is accelerating. Average company lifespan on the index has collapsed from 61 years in 1958 to 21 years in 2020. Innosight forecasts it will hit 12 years by 2027.
AVERAGE S&P 500 COMPANY LIFESPAN (YEARS)
195861 years
196433 years
1980~32 years
2000~25 years
202021 years
2027 (forecast)12 years
Source: DropThe.org | S&P Dow Jones Indices, Innosight | 20K+ companies trackedDROPTHE_
If the forecast holds, half the current S&P 500 will be gone by 2037.
DropThe Data: The DropThe database tracks 20,000+ companies across all sectors and exchanges. Of the S&P 500 original members from 1957, only 53 remain. The current index is dominated by technology (21% of weight) — a sector that barely existed when the index launched.
The Graveyard: Companies Nobody Remembers
The 1955 Fortune 500 included names like Armstrong Rubber, Cone Mills, Hines Lumber, Pacific Vegetable Oil, and Riegel Textile. None exist in any recognizable form today.
Some fell to technological disruption. Kodak invented the digital camera in 1975, then spent 30 years pretending film would survive. Xerox built the graphical user interface and the mouse at PARC, then watched Apple and Microsoft take those inventions to market.
Others fell to financial engineering. Sears was America’s largest retailer with 350,000 employees. By 2018 it was bankrupt, its real estate worth more than its retail operations. General Electric, once the most valuable company on Earth, broke itself into three pieces after a decade of financial mismanagement.
What Replaced Them
This is an excerpt. Read the full analysis with charts and data on DropThe.org
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