Conference nyoss1::market_investing

249.0. "1 company split's into 2" by CAMONE::ZIOMEK (Pump up the TEST) Thu Jul 16 1992 09:23

    
    
    	I own a block of shares in a corporation that has recently
    "spun-off" one of it's subsidaries into a new, public company. 
    At the end of this month all share holders will get 1 share in the new 
    company for every 10 share's that they own in the larger corporation.  
    The stock of the larger corporation has stayed pretty steady over the 
    last two month's after a brief run up and then partial retreat due to
    buy out rumor. My question is... What will happen to the stock price of
    the original corporation? Since it is trading at about book value right
    now? Should I expect the price to decline to the new book value after it is 
    computed, where as the new book value would be the old book value,
    minus the earnings that the "spin-off" corporation is not contibuting
    any more? Has anyone ever followed a situation like this?
    
    Thanks,
    John