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Barnes & Noble, Inc. Message Board

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  • hotpanera2 hotpanera2 Nov 7, 2004 3:00 PM Flag

    gamestop distribution

    I have no statistics. However, I recall being pleased when, for example, Pharmacia spun off Monsanto, when Ford spun off Visteon, etc. Just last week the market celebrated vague statements by Altria that it would spin off Kraft. Frequently shareholders urge companies to spin-off unrelated businesses to "unlock value". Put spin-off and "sum of the parts greater than the whole" into Google and you'll have alot to read in support of this premise. Of course, nobody knows how a stock would have traded absent the spin-off so that even if the Bks stub and GMEB exceed the current Bks, it won't prove anything. But I like the odds.

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    • Thanks for your replies, and I was wondering if you could answer one further question. GME shares are being distributed to owners of record as of Nov.2, though the actual distribution will take place on Nov. 12. So my understanding is that if you buy BKS shares on any day after Nov. 2, you cannot claim the GME shares (which will be allocated to the previous owner as of Nov. 2). Shouldn't the price then have declined on Nov. 2? Thanks.

      • 1 Reply to kjayakar2000
      • For spin-offs, unlike dividends, the ex-date does not mean that if you buy BKS after the ex-date that you don't get the GMEB stock. The only significance of the ex-date is that beginning then, the stock starts trading on a when issued basis ex the spinoff. So there is now a BKSwi which traded a bit last week in the 25s. I saw the quote in Barron's, though I haven't been able to find it on Yahoo or Fidelity. There is also a GMEBwi. Until the actual distribution after the close on 11/12, BKS will continue to trade with the GME distribution. Not until 11/15 will BKS trade without the right to receive GMEB and, therefore, at about roughly $10 less than it closes on the 12th.

 
BKS
26.35-0.39(-1.46%)Jul 28 4:03 PMEDT