Spin-offs take place regularly in the USA. According to a study, spin-offs between 1990 and 2015 showed an average excess return of 10.4 percentage points compared to the benchmark in the first year after the spin-off. Because of this, speculation about a spin-off often leads to price gains.
The latest example is IBM: The IT giant has announced that it will henceforth focus on the lucrative cloud business and therefore want to spin off its network services business. Therefore, the Managed Infrastructure Services division is to be spun off and listed on the stock exchange as an independent company. The shareholders of IBM should then receive the shares in the new company. The separation should be completed by the end of 2021.
In the course of the spin-off announcement, IBM also presented preliminary figures for the third quarter. The company expects sales of $ 17.6 billion and earnings per share of $ 2.58. The profit is thus slightly above the average analyst estimate. Above all, the spin-off plans give the share imagination, which is why we classify it as a “buy”.
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