RE:RE:RE:RE:Spinoff Had two spins offs in my portfolio in the past couple years.
example of how it could work:
DM retains 20% equity in new entity.
the remaining 80% is distributed according to ownership of DM shares (sometimes minus cost of listings or certain cash reserves or supports to the new company... listing fees and such)
they choose a ratio that fits best to listing. 1 share for every 100 , 10 for every 100 , it does not really matter. Market cap will determine the value of each share afterwards and upon opening the market will determine where the market cap will readjust. Generally you don't want it under .05 as it just sets you up for a reverse split if they need funds to expand. Maybe they want the share price to land at .30 cents. So they will move the ratio accordingly for let's say a Market cap of 5 million.
The value of DM shares at that point should theoretically drop by the amount of Market Cap removed.
do your own DD. I am not a professional. Just trying to give an example in a rather rudimentary explanation.