Subsidiary spin-off

A subsidiary spin-off is when a parent company separates one of its business divisions into an independent, publicly traded company. You'll see this announced in SEC filings and news releases when large corporations decide to split up. It matters because spin-offs can unlock value—sometimes a division grows faster on its own than it did inside a bigger company, which can benefit shareholders of both the new and remaining company. For example, if TechCorp owned both software and hardware divisions, it might spin off the hardware business as HardwareCo, a separate company with its own stock. After the spin-off, you'd own shares in two companies instead of one.