TRACKING STOCK Meaning and
Definition
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Tracking stock is a financial term that refers to a type of equity security issued by a parent company that specifically tracks the financial performance of a particular division or business unit within the parent company. This type of stock is often issued by large conglomerates that want to unlock the value of a specific business division without actually spinning it off as a separate company.
By issuing tracking stock, the parent company allows investors to purchase shares in the specific division, enabling them to benefit from its financial performance without actually owning it outright. The value of the tracking stock is closely tied to the financial performance of the specific division. This allows investors to have a separate valuation and financial exposure to a particular part of the overall company, providing them with a way to invest directly in the success of that division.
Tracking stock can be an attractive option for investors who are interested in investing in a specific division of a company instead of the broader company itself. It provides a means for investors to have exposure to and potentially profit from the success of a particular business unit, while still allowing the parent company to maintain control and ownership of the division. However, it is worth noting that tracking stocks have specific risks, including potential dilution of ownership and limited control over the specific division.
Common Misspellings for TRACKING STOCK
- rracking stock
- fracking stock
- gracking stock
- yracking stock
- 6racking stock
- 5racking stock
- teacking stock
- tdacking stock
- tfacking stock
- ttacking stock
- t5acking stock
- t4acking stock
- trzcking stock
- trscking stock
- trwcking stock
- trqcking stock
- traxking stock
- travking stock
- trafking stock
- tradking stock
