Spinoffs refer to a company creating a new entity out of its existing assets and revenue. Spinoffs may or may not be announced to the market prior to their public announcement and processing. This makes spinoffs one of the more challenging to communicate prior to occurring.
Operationally, Spinoffs can include several different variables, including symbol changes, conversions (stock and cash), and the decrementing the value of the Parent Co., spinning off into the New Co.
When a Spinoff is processed, there is typically a new symbol created, to which a portion of the Parent Co.’s value (share conversion at an agreed upon price) is assigned to the New Co.
Updated 8 months ago