NETGEAR Will Spin Off Remaining Arlo Stake Next Week, Arlo Will Enter S&P SmallCap 600

Five months after it floated 15.8% of Arlo(ARLO) in an IPO, NETGEAR(NTGR) will be spinning off its remaining stake to shareholders. For each share of NETGEAR held on December 17, shareholders will receive 1.980295 shares of Arlo common stock on December 31. The transaction is expected to be tax free to shareholders.

Arlo has struggled since its IPO in August. It priced at $16 and quickly ran up above $22. Last Friday, it closed at $9.40.  A revenue shortfall announced earlier this month did not help matters.  As we discussed last February, the company’s challenge will be maintaining growth in a crowded market.

Following the distribution, on January 3, Arlo will join the S&P SmallCap 600 Index, replacing Cloud Peak Energy(CLD). At the same time(unrelated to this), will replace Francesca’s Holdings Corp.(FRAN).

Disclosure: The author holds no position in any stock mentioned



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