Spin off / Split Questions ?

Discussion in 'Growing and Managing a Business' started by biznettren00, Oct 13, 2014.

  1. biznettren00

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    Oct 13, 2014
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    1) So in a spinoff the company essentially vaules the part that they are spinning off and issues shares. For example if you have 2 shares of stock in a company and they are spinning off a division that is approximately 50% of the company, then you would be divested to 1 share in the company and given 1 share in the new company, correct?

    2) If the company that is spun off is entirely it's own company (own management team, stock, hr etc) with no crossover from the original company: will management of the orignial company have to report if they sell off their shares in the new company?

    I know management in a company has to report their buy and sells, grants etc. but if they have shares in a new totally separate company where they are not on the board or in management, can they sell without reporting?

    My underlying question is, can management of a company say "we are spinning off part of the comapny and will have two publically traded companies and they will both be great" but they stay with the original company and as soon as it's spun off dumb their stock in it.

    3) Do board members have to report insider trades i.e their buys and sells like management does, or can they buy and sell freely without reporting?

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