Bloomberg – Spinoff Trade Shows Resilience in a Desolate Market
Jun 15, 2022
Investment bankers bemoaning the dearth of large stock offerings this year can take comfort from one relatively robust area of the market: the spinoff of units by larger companies. Tax-free spinoffs are outperforming other newly listed stocks, as well as the broader market, during this year’s volatility. That’s partly due to a lack of selling pressure from retail investors who’ve unloaded other new stocks en masse.
Spinoffs that bypassed an initial public offering were largely overlooked by the hoards of new traders who emerged during the pandemic, said Jim Osman, founder of The Edge Consulting Group, a research firm that specializes in spinoffs. They preferred the fast-growing tech companies, IPOs or the infamous meme stocks — all shares they are now dumping.