Those hoping for the IRS to provide clear guidance on spinoff related tax issues can keep holding their breath because it’s not coming anytime soon, at least according to Robert Wellen, associate chief counsel of the U.S. tax agency. According to Mr. Wellen, these types of projects take a lot of time to complete, but on the plus… Read More »
With spinoffs becoming even more popular, it’s worth remembering that these transactions affect lots of people and are actually quite complicated. We previously some highlighted cultural and morale issues that may arise during the process, but there are plenty more that we haven’t touched on. There is a reason the timeline from announcement to completion is typically 6-18… Read More »
Lexology has a nice overview of tax inversions and the government response to them. Of particular note to us was one practice Treasury has sought to end, known as “spinversions”: No Spinversions. The U.S. entity would not be allowed to transfer its assets to its current foreign subsidiaries and then spin off those subsidiaries to its public shareholders… Read More »
We are big fans of Jana Partners here. Although the fund describes its investment approach as ‘value plus catalyst’, it’s not afraid to get vocal and create its own catalyst. Just ask Agrium’s (AGU) management team. While that situation didn’t achieve the desired result, the firm has notched numerous activist victories including the spinoffs (or possible spins) at… Read More »
These pages have frequently highlighted the many victories notched by activists pushing for breakups. We are big, big fans of those guys. Of course, like all good battles, the other side doesn’t just sit back and wait to be ambushed. No, new tactics are drawn up, plans laid and in this case that means talking to lawyers. About… Read More »
13F season is always fun as it provides a rare (albeit delayed) glimpse into the thinking of large money managers and hedge funds. Of course, due to the significant time lag (~45 days), the exclusion of certain securities (shorts, derivatives etc.) and varying investment strategies and holding periods, the usefulness of such data is…questionable in many cases. Not… Read More »
Twice a year, Barron’s gathers some of the top minds in the industry for a roundtable discussion on the worldwide investment environment and economic outlook. This year’s panel included the same regulars as usual, financial titans all, PIMCO’s Bill Gross, uber-bull Abby Joseph Cohen, GAMCO Investor’s (GBL) Mario Gabelli and Felix Zulauf. In addition to pontificating on the… Read More »
Another year has come and gone which means that we have all been inundated with a million ‘Look Back’ and ‘Best Of/Worst Of’ pieces for the past few weeks. I always found this to be an interesting and immensely boring phenomenon as we just lived through it. Should be pretty fresh in our memories. We are nothing but… Read More »
Investing in spinoffs is certainly becoming more ‘mainstream’. As proof, Forbes’ most recent issue had a long writeup on the space titled ‘Why Spinoff Stocks Are Sizzling (And Should Stay Hot)‘. The piece is worth checking out and discusses the usual spinoff investment stuff – elimination of the conglomerate discount, corporate discard, ignored by market etc. – along… Read More »
Like many others, I was first introduced to the world of spinoff investing by reading Joel Greenblatt’s You Can Be A Stock Market Genius. Horrible title (and cover), but great book. In a sense, you might even say that he is the grandfather of this site. Naturally, I am always interested in hearing what he has to say… Read More »
Do spinoffs actually outperform the market? We often receive this question and point to Joel Greenblatt’s work and some other older studies. Luckily there are other people still examining the data for us and new research by Credit Suisse’s quantitative team (highlighted in this Barron’s ‘Focus on Funds’ blog) suggests the answer is still yes. According to CS’s findings, when… Read More »
It’s tough to be a CEO or board member these days. It used to be so easy, but now those pesky shareholders cause too many headaches. ‘Say on Pay’? What? Do they think they own the company or something? The only thing worse are those so called ‘activist’ shareholders, pushing to create ‘value’ or profits in their pockets.… Read More »