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academy · special situations

Academy

How is the list card read?

Each number marks one line or figure of the card; below, what it shows and how it is read. The card is a schematic: it carries no deal's data.

  1. 1Line 1 · Subsidiary Ticker and Market

    Identifies the stock of the newly separated entity that starts trading on its own: ticker, exchange and country, the family label and the days elapsed since the announcement (Day N).

  2. 2Line 2 · Spun-off Company

    Name and sector of the independent business carved out of the parent. Frequently ignored by generalist analysts.

  3. 3Line 3 · Separating Parent

    Shows the original parent company under the label «Parent». The ratio at which shares are delivered to shareholders is found in the Parent vs SpinCo tab of the case.

  4. 4Line 4 · Score and DRI

    Chips for the situation's composite score and the Deal Reliability Index (DRI), when they are computed. The score is not the case's RAAS; when the value is missing, the chip is not shown.

  5. 5Headline Metric: Spread and IRR

    Valuation gap caused by the forced selling of institutional funds that are not allowed to hold the stock. The card shows it as a spread, with the IRR underneath, only when a sourced reference price exists; in a spin-off it is usually missing and both appear as N/D, never estimated.

  6. 6Post-Debut Spot Price

    Trading price after the parent's funds have dumped their initial allocation. If the situation had an offer price, it would appear underneath as «Offer».

  7. 7Net Cash Floor and Asymmetry

    Clean cash transferred to the subsidiary, acting as a fundamental floor. The card does not show the downside: the case gives it in Summary (downside to the unaffected T-1 price and asymmetry) and the allocated debt in Parent vs SpinCo.

  8. 8Floor: End of the Indigestion Period

    The milestone to watch is the date on which non-eligible funds finish selling and the price converges to its peers' multiples. The card footer shows the current stage and, if there is one, the close: «Close (formal date)» only with an official date; otherwise «Estimated close».