What is a spin-off?

A spin-off is the creation of an independent company through the sale or distribution of new shares of an existing business or division of a parent company. When a corporation spins off a business unit that has its own management structure, it sets it up as an independent company under a renamed business entity.

 

The spin-off companies are expected to be worth more as independent entities than as parts of a larger business.

 

This corporate event may affect the stock rates on the day of the spin-off.

 

See also:

How does TBanque respond to a spin-off?