Spin-Off

When a company turns a division into a separate, independently traded company.

In a spin-off, a parent company distributes shares of one of its business units to its own shareholders, creating a new standalone public company. The logic is focus and valuation: a conglomerate's parts often trade at a discount together, and independent management can move faster. PayPal's 2015 separation from eBay let the payments business be valued on its own explosive growth. Studies have found spun-off companies often outperform in their first years of independence — freed from fighting for the parent's capital.

The conglomerate announced a spin-off of its streaming unit, giving each shareholder one share of the new company.