Spin Out

What is a 'Spin Out'

A spin out is a type of corporate restructuring. Spin outs occur when a corporation breaks off parts or divisions of itself to form a new corporation. The new company that is spun out brings with it some of the parent company's assets and equipment. The SEC defines a spin out as when the parent company has a stake in the equity of the newly formed company.

BREAKING DOWN 'Spin Out'

Parent companies often provide support for their "children" by investing equity in them or becoming their first major customer. In many cases, the management team of the spin out firm is drawn from the parent company as well. Parent companies spin out new companies from themselves for many reasons, such as to market a new product under a different company name.

RELATED TERMS
  1. Tax-Free Spinoff

    A corporate action in which a publicly traded company spins off ...
  2. Minority IPO

    An initial public offering in which a parent company spins off ...
  3. Wholly Owned Subsidiary

    A company whose common stock is 100% owned by another company, ...
  4. Spinning

    The act by a brokerage firm or underwriter of offering shares ...
  5. Associate Company

    A corporation whose parent company possesses only a minority ...
  6. Taxable Spinoff

    A divestiture of a subsidiary or division by a publicly traded ...
Related Articles
  1. Personal Finance

    Finding Spin In The Financial Services Industry

    The financial services industry may stop short of lying outright, but that doesn't mean that everything they say about their products is the truth.
  2. Economics

    What is a Spinoff?

    Businesses wishing to streamline their operations often sell less productive or unrelated subsidiary businesses as spinoffs.
  3. Retirement

    Helping Aging Parents Manage Their Money

    Old age can make dealing with finances difficult. Find out how you can help aging parents manage their finances and estates.
  4. Financial Advisors

    Top Financial Planning Issues for Older Parents

    Clients who have children later in life present an opportunity for advisors. Here are the key the financial planning issues that need to be addressed.
  5. Credit & Loans

    The Booby-trapped World of Parental College Loans

    Private parent loans can help families pay for college. But the repayment timeline associated with the loans can hurt parents’ retirement savings.
  6. Options & Futures

    Mergers and Acquisitions: Break Ups

    As mergers capture the imagination of many investors and companies, the idea of getting smaller might seem counterintuitive. But corporate break-ups, or de-mergers, can be very attractive options ...
  7. Retirement

    IPO Basics: Tracking Stocks

    Tracking stocks appear when a large company spins off one of its divisions into a separate entity. The rationale behind the creation of tracking stocks is that individual divisions of a company ...
  8. Financial Advisors

    How Advisors Can Help Expectant Couples

    Bringing a child into the world makes parents more acutely aware of their finances. Here's how advisors can help expectant couples prepare.
  9. Financial Advisors

    The Pitfalls of PLUS College Loans

    Here's how parents can avoid the pitfalls of PLUS Loans when it comes to funding their children's college education.
  10. Financial Advisors

    Top Tips for Family Wealth Transfers

    Essential tips for tackling family wealth transfers.
RELATED FAQS
  1. How do I build a profitable strategy when spotting a Spinning Top pattern?

    Learn a simple, low-risk trading strategy that can be employed when a spinning top candlestick forms under certain circumstances ... Read Answer >>
  2. How effective is creating trade entries after spotting a Spinning Top pattern?

    Understand the significance of the spinning top candlestick pattern and learn how to create more effective trade entries ... Read Answer >>
  3. How are Spinning Top patterns interpreted by analysts and traders?

    Discover the spinning top candlestick pattern and understand its significance and how it is commonly interpreted by traders ... Read Answer >>
  4. How do spinoffs impact investors in the both the parent and subsidiary companies?

    Learn about how spinoffs affect investors in both the parent company and the subsidiary and what strategies investors use ... Read Answer >>
  5. What are the main differences between a Doji and a Spinning Top pattern?

    Identify the differences between doji candles and spinning tops on a candlestick chart, and learn how traders look at each ... Read Answer >>
  6. How do I implement a forex strategy when spotting a Spinning Top Pattern?

    Learn a simple forex breakout trading strategy that can be implemented when a trader identifies a spinning top candlestick ... Read Answer >>
Hot Definitions
  1. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  2. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  3. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  4. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  5. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
  6. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
Trading Center