Corporate breakups: Do they make sense? #shorts #markets #finance

Spin-off Performance - Spin-offs and breakups of S&P 500 companies occur frequently, with an average of 6 to 12 events annually [1] - Historically, these spin-offs tend to perform at an average level, eventually aligning with S&P 500 returns [1] - Indices that invest in spun-out entities often perform in line with or underperform the S&P 500 [2] Value Creation - Spin-offs generally do not create significant value [2][3] - Value creation is possible when the spin-off enables distinct activities, attracts different talent, or appeals to new investors compared to the original conglomerate [3] - Splitting a business can add value from a valuation, growth, or opportunity perspective in certain outlier cases [2]