Spin-off is a corporate action where a company separates a business operation and creates a completely new entity, normally as another public company. These are rare, occurring for about 2% to 3% of large US companies annually. Shareholders receive shares of the new entity and the value of their current stock drops by the same amount. Some pricing services account for spin-offs as special dividends.
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Doc: Can someone explain the logic for why
the Board of Directors would initiate a
Tom: Wouldn't it be like a pastry shop selling the best piece of a pie at a higher price than the other slices?
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