A certain company is splitting in order to separate two segments of its business. One segment is struggling to stay above water while the other appears to be prepping the Launchpad.
The smart money is flocking to the latter, and results are already flying in.
Here’s everything you need to know, from which company is splitting to how to profit from it.
It’s a done deal. We’re now 5 trading days beyond the splitting of Gannett. A big weight has been shed via a spinoff, and now the two parts of the same company could be headed in very different directions.
Let’s take a quick look at both segments of Gannett:
1. The new Gannett stock (GCI) will continue to own USA Today in addition to nearly 100 local U.S. papers and some British papers.
2. Tegna (TGNA) will take the broadcast side of operations, including 46 broadcast stations, as well as Cars.com and CareerBuilder.
If someone just handed you $1,000 and made you invest it in one of these two stocks, which would you choose?
It probably isn’t too difficult for you to make up your mind, right?
Print publications have been floundering in recent years, and more unimpressive news regarding newspaper ads just adds to the negativity surrounding newspapers.
That’s not exactly great for GCI.
On the other hand however, TGNA has just shed a ton of weight by releasing itself from the suffocation of newspapers and focusing on broadcast.
And here’s how the two stocks have performed since the split:
- GCI opened days ago at $14 per share. It’s now right around the same price and has fluctuated above and below $14.
- TGNA began its new life after the split by dipping slightly alongside the overall market, but then shot up from $29.50 per share to over $31.50 per share on a day when the benchmark S&P 500 fell to its lowest price in a couple of weeks.
According to many experts, the opening days for both of these stocks could represent a much longer-term outlook- newspapers are doing everything they can to keep their heads above water while broadcast is on the rise.
Now, just in case you were already invested in Gannett, your shares will be split up into 1 share for GCI and 1 share for TGNA for every 2 shares you own.
But whether or not you already own shares, taking advantage of this split could be as easy as having some common sense…
