What does "spin off" mean?

Question

Is it for one company separated from its parent companies completely?

or, the parent company still retain the biggest stocks, while one company distribute the other stocks?

It would be great if you explain it in an easy way. Thanks!

Answer 1

a spin-off is a company owned by a parent company but does its own business.

like tim hortons used to be a spin-off of Wendy's International.

Answer 2

Its when one company is completely seperated from the parent company and relationships are severed...banking, employees, rules, different articles of inc., etc....

Answer 3

It means "cheap imitation"...

It is a product that is copying the popular brand.

Much like how Aldi's (grocery store) sells spin-offs of Little Debbie snacks and sells them under a different name so it is cheaper.

orrrr, ummm, a cockatiel is a spin off of a cockatoo??

I dunno.  U get my drift?

Answer 4

In most cases, in corporations "spin off" means a "parent company" creating another company, usually in a different sector of business.  This "spin off" will operate independently of the "parent" with its own "staff", and can have its own "executives", i.e., President, CEO, CFO, etc.  

A great example, many "large", "well known" Architectural firms design and create plans for buildings.  A "spin off" of this, a company offering "interior design" , "setup", "office furniture", for the interior once a building is complete.  

In Atlanta, for example, one Architectural firm, Wakefield-Beasley, has a "spin off", "Facility Solutions".  FS from a buildings interior, "designs", "sells" all office furniture/petitions/cabinets/files, anything necessary, and does the "install".  "Spin off" with separate President, staff, management, independently operated.

You may have "spin off" companies operating as a d/b/a, "Doing Business As".  In the 1980's-1990's Delta AirLines created an auditing department operating independently, now known as "resourcing".  I cannot remember the company name Delta used but it was known as, "Company Name LLC d/b/a Delta Airlines.  

"Resourcing" is "huge" in this age of business and corporate "Personnel Service' companies (I still call them Temp Services) now have "spin off" companies offering "management teams" used to come into a business to "analyze" for improvements to help eliminate costs, solutions for better operations, etc.  This would also include recommendations for "out sourcing" departments, i.e., many huge corporations now "outsource" Accounting Departments, i.e., CocaCola USA.

In cases I know the "spin off" is in direct coalition with "parent" company as far as "stocks".  Responsibility to "stockholders" continues to be maintained under "parent", therefore, "spin off" companies MUST make sense, and above all, be PROFITABLE.

Hope this helps.  Good Luck, stay positive.

Answer 5

A spin off is when a company does a full or partial divesting of a company that it owns due to economic reasons. Usually spin offs can be a good thing, but sometimes a bad thing.

Examples:

Good spin off: Altria used to own Kraft (KFT) and Phillip Morris Int. (PM) Because of the lawsuits in the U.S., Altria spun off PMI to protect the company profit from the lawsuits, and completely spun off Kraft because it didn't fit the business model of Altria.

Bad spin off: GM spun off Delphi due to it's massive debts. Delphi hasn't been able to recover from the spin off and has cost GM millions.

Hope this explains it for you.