IPO Report: IPOs are out of fashion. Here’s what companies are doing instead.

by | Oct 6, 2023 | Stock Market

While the current deal landscape on Wall Street remains low on M&A, initial public offerings (IPOs), and other transactions, corporate spinoffs are chugging along. With companies under pressure to focus on their core business, a mini-flurry of spinoff stock debuts and new proposals have emerged in the past week.

“Spinoffs today are just more visible, given the paucity of IPOs,” said Jay Ritter, a finance professor at University of Florida who tracks the new issues market. In good times, Wall Street is hungry for any new stock and spinoffs are cheered as a way to unlock the value hidden in a neglected part of a conglomerate. Right now, however, the uncertainty about value, combined with market volatility around the debt ceiling, a spike in bond prices and turmoil in Congress, has translated to some bruising losses of late in freshly spun off stocks.

Veralto Corp.
an environmental solutions business that was spun out of Danaher Corp.
has fallen 12% in the past five days. It officially joined the S&P 500
on Monday.

Vestis Corp.
which star …

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