An Event Study of Equity Spin-off’s in the 21st Century

Open Access
Author:
Southmayd, Geoffrey Edward
Area of Honors:
Finance
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
  • James Alan Miles, Thesis Supervisor
  • James Alan Miles, Honors Advisor
  • Joseph Randall Woolridge, Faculty Reader
Keywords:
  • Spin-off
  • parent firm
Abstract:
The purpose of this study is to examine the stock performance of firms that have spun-off a business in the 21st century. The Wharton Research Data Services (WRDS) was used to identify all spin-offs occurring from 2000 to 2009 as well as to collect return data for the companies. These returns were then measured against two benchmarks, the S&P 500 as well as each firms sector in the S&P 500, to evaluate the performance of the firms. These findings will demonstrate whether spin-offs display the same fast growth and high takeover activity as was found in studies of more dated spin-offs.