Dan Ives of FBR Capital Markets discussed four companies that could split up. Many investors speculate on spin-offs, because stocks of such companies usually rise on the news of a breakup and long-term value can be created by demergers. Recent high-profile spin-offs have included news that Paypal is breaking away from its parent company, eBay and, Hewlett Packard is splitting up into two divisions: Hewlett Packard Enterprises, its software segment, and HP Inc., its personal systems and printing business.
Ives and Karen Finerman on CNBC’s Fast Money identified 4 additional potential breakup stories. Ives thinks Symantec should spin off its storage business, because “The storage business has really been the overlay here. We could see them getting rid of that.” Ives thinks private equity will likely buy the storage business, and that the cybersecurity segment will do better on its own. Citrix could sell its cloud business, possibly to F5 Networks or IBM. Since Citrix has some activist investors, it is likely to make a bold move. EMC owns 80% of VMWare, and Ives thinks it should sell the business, or at least sell part of it.
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Karen Finerman thinks Manitowoc could and should split up. She said its crane and food service business don’t really make sense under the same roof, and the company would be easier to deal with after a break-up, since there are few synergies between these segments. Finerman thinks Manitowoc’s purchase of the food service business was a “damaging acquisition” that should never have taken place.