Post by
kingscorpion on Aug 17, 2020 10:49am
Discussion on potential SPIN OFF
Let's talk about what happens to your shares when 1 division is span out and let's say you have for ex 50000 shares What do you think happens to your shares
Comment by
kingscorpion on Aug 17, 2020 11:11am
When a division is spanout You as a share holder automatically become share holder of the new entity You will have shares on both side of the company . Ok who is Google ing now LOL
Comment by
Snowdrift on Aug 17, 2020 11:35am
Hi King, I've never owned a company before, that spun out a division. In your example, when you say we would automatically become a shareholder of the new entity, would we then also own 50,000 shares of the new entity? Or would the CEO specify that for each 10 shares of PYR, ex., we would get 1 share of the new entity? Snowdrift
Comment by
kingscorpion on Aug 17, 2020 12:09pm
If you owned say 50000 shares in the parent company When a division gets span off It will depend on its market cap to parent companies market cap So if it is 1/5 of the parent company then you will have 10000 shares in the spin off company.
Comment by
Snowdrift on Aug 17, 2020 12:23pm
Ooh, that sounds great !!! Just to be sure I understand this correctly, I'd still own my entire 50,000 shares of PYR, right? Or would my 50,000 shares of PYR get dropped to 40,000 shares?
Comment by
Snowdrift on Aug 17, 2020 3:08pm
Thanks, your answer makes things even clearer. Here's hoping the spinned-out division does well.
Comment by
Aarman4 on Aug 17, 2020 3:14pm
I highly recommend reading up on spinoff success history, especially from Joel Greenblatt, and to a lightly lesser degree from Peter Lynch....... Joel Greenblatt does an incredible job explaining spinoff history and why they tend to be VERY good investments moyai of the time. I will likely load up on the spinoff if it makes sense, a few months after it happens.... Cheers
Comment by
Snowdrift on Aug 17, 2020 3:17pm
OK, thanks for the suggestions.
Comment by
kingscorpion on Aug 17, 2020 3:30pm
In my experience the spin off company as well as the parent company both went up after intradayi low on the parent company It dropped aprox 10% then turned around and finished higher So never say never