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ITT Corporation Message Board

  • rst4803 rst4803 Oct 13, 2011 3:12 PM Flag

    "When Issued" trading

    Exelis (xls/wi on schwab) and Xylem (xyl/wi on schwab) started trading "when issued" today.
    1210 hours - xls @ 11.60, xyl @ 24.12.

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    • Someone much smarter than me on this topic please... A few questions:
      (1) If the 2 spinoffs are $24.12 and $11.60, that is $35.72. The existing ITT, call it $44 but it will reverse split 1 for 2 therefore it is $22. TOTAL: $57.72 is what the entity is selling at right now. If true, why isn't everyone buying up the ITT stock and cashing in?? I must be missing something, have been trading for 30 years but this concept is new.

      (2) how do you obtain a quote on those 2 spinoffs?

      (3) Regarding the spinoffs, they will certainly become part of index funds and relevant etf's (water etf's will need to buy, etc). So, lots of buying ahead. OR... has that index fund and etf buying already been done in advance which created the market for the 2 spinoffs in the first place? If not, then the price should rise substantially as the index funds and relevant etf's purchase the two spinoffs. Again, I ask, am I missing something?

      Thanks in advance for an intelligent discussion on this topic.

      • 1 Reply to fund_racer
      • first off lets straighten out what you get, for every 2 shares of current ITT you get 2 shares xls, 2 shares of xly and one share of the new ITT,
        second, you may know the prices of the first two wi but you dont know the third one as it has not traded and doesnt necessarily have anything to do with current price. that is the speculation, it wont be 44/2, as the 44 reflects value of xls and xly that will be removed.

47.64-0.54(-1.12%)Sep 19 4:06 PMEDT

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