Turning part of a company into a separate company
In a spin-off, a company carves part of its business out into a new company and hands the new company's shares to its own shareholders. Shareholders keep their original shares and receive the new ones as well. The aim is often to make each business's value easier to see or to speed up decisions. The new company frequently lists its shares separately.
If each original share earns 0.5 new shares, a holder of 100 shares receives 50 shares of the new company.
For learning, not investment advice. Decisions are your own.
StockFit · TrueNorthLabs Inc.