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Split-offs

Written by admin | Jun 30, 2017 10:31:18 AM

At The Edge, one of our areas of expertise is split-off investment research. Our goal is to discover and break down imbalanced reward or risk situations where voluntary corporate actions or atypical corporate structures create significant value. Oftentimes, these processes are generally not transparent and straightforward. That’s where we come in. We strive to ensure our clients do not leave alpha on the table.

The Edge | What Are Split-offs?

A split-off happens when an existing corporate structure is being reorganized. In addition, the stock of a newly affiliated company, subsidiary, or business division is transferred to the stockholders of the parent company in exchange for stock. With that, split-offs normally occur when the parent company has a plan to establish a greater distinction between the split-off business and itself.

Split-offs can also be viewed as a sale for accounting purposes with a recognized loss or gain that is equal to the difference between the market price of the parent company’s and new split-off’s stock being issued. Provided that split-offs meet the requirements set forth by Section 355, there will be no corresponding loss or gain recognized for tax purposes; they can be tax-free.

The Edge | Why You Need Actionable Intelligence On Split-offs

As you would already know by now, split-offs are a tax-efficient way for a parent company to redeem its shares. However, split-offs require existing shareholders to tender their parent company shares to receive new shares of the subsidiary. When this happens, they may suffer from lower certainty of execution. Another thing you should note is the potential for shareholder lawsuits. Lawsuits tend to occur if the premium or exchange ratio offered by the parent company is deemed unfair by activist shareholders. That’s why it is imperative that you acquire all the information that are essential for making the correct and profitable investment decisions. The Edge is here to help you with that.

The Edge | Why Choose Us for Split-off Research & Analysis?

The Edge has been in the investment research field for more than a decade. We have a dedicated team of analysts that applies our collective unmatched expertise to track, monitor, and analyze the source of value and provide the findings to you as an actionable investment. When you work with us, you no longer have to waste precious time on reading obsolete mainstream research. When you are looking into split-off investments, and want to get focused investment ideas from different angles, we are here to help. You can rest assured that we have been providing significant ROIs to our clients and possess an accountable track record of an +8.5% alpha since our inception.

Your search for high conviction split-off investment analytics is over. Get in touch with The Edge team today for more information.