Performance Of Recent Spinoffs And An Interesting Upcoming Spinoff

Joel Greenblatt, the founder of the hedge fund Gotham Capital and adjunct professor at Columbia Business School, managed to build a stellar track record from 1985 to 1994 with average returns of 50% per year by focusing on special situations and event-driven strategies. He published You Can Be a Stock Market Genius in 1997 and made the case for tracking spin-offs and especially paying attention to insiders of spin-offs. Towards this end, we started tracking spinoffs on InsideArbitrage in 2016 and as a premium subscriber you have access to both the list of upcoming spinoffs as well as completed spinoffs that allow you to track the performance of both the spinoff as well as the parent company.

With spinoffs garnering widespread attention in recent years both on account of Greenblatt’s book and various academic studies that have shown them to outperform the market, one would expect that this niche of the market may not do quite as well as it has in the past. I decided to pull up the list of all completed spinoffs since 2016 to see how both the spinoffs and their parents (or stubs) performed.

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