Spinoff

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Dictionary Says

Definition of 'Spinoff'

The creation of an independent company through the sale or distribution of new shares of an existing business/division of a parent company. A spinoff is a type of divestiture.
Investopedia Says

Investopedia explains 'Spinoff'

Businesses wishing to 'streamline' their operations often sell less productive, or unrelated subsidiary businesses as spinoffs. The spun-off companies are expected to be worth more as independent entities than as parts of a larger business.

Related Definitions

  • Carve-out

    1. Sometimes known as a partial spinoff, a carve out occurs when a parent company sells a minority (usually 20% or less) stake in a subsidiary for an IPO or rights offering. 2. Where an ...
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  • Rights Offering (Issue)

    Issuing rights to a company's existing shareholders to buy a proportional number of additional securities at a given price (usually at a discount) within a fixed period.
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  • Sum-Of-Parts Valuation

    Valuing a company by determining what its divisions would be worth if it was broken up and spun off or acquired by another company.
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    • Breakup Value

      The sum-of-parts value of a publicly traded company. This value is derived by analyzing each business segment of a company independently. This is usually applied to large cap stocks that ...
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    • Parent Company

      A company that controls other companies by owning an influential amount of voting stock or control. A parent company will typically be a larger firm which exhibits control over one or ...
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    • Divestiture

      The partial or full disposal of an investment or asset through sale, exchange, closure or bankruptcy. Divestiture can be done slowly and systematically over a long period of time, or in ...
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    • Conglomerate

      A corporation that is made up of a number of different, seemingly unrelated businesses. In a conglomerate, one company owns a controlling stake in a number of smaller companies, which ...
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    • Subsidiary

      A company whose voting stock is more than 50% controlled by another company, usually referred to as the parent company.
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    • Scrip

      1. A written document that acknowledges a debt. 2. A temporary document representing a fraction of a share resulting from a split or spin-off. Scrips may be applied to the purchase of ...
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    • Corporate Action

      Any event that brings material change to a company and affects its stakeholders. This includes shareholders, both common and preferred, as well as bondholders. These events are generally ...
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