Trading Concept
  • Home
  • Trading News
  • Email Whitelisting
  • Privacy Policy
  • Home
  • Trading News
  • Email Whitelisting
  • Privacy Policy
No Result
View All Result
Trading Concept
No Result
View All Result
Home Trading News

Johnson & Johnson Is Becoming Two Companies. What Happens to My Stock?

by
November 13, 2021
in Trading News
0
0
SHARES
0
VIEWS
Share on FacebookShare on Twitter

RELATED POSTS

Cathie Wood says rising rates hit her strategy like an earthquake and cyclical stocks are next

Potentially deadly fungus is spreading at an ‘alarming rate,’ CDC says

Johnson & Johnson said Friday it is splitting up into a consumer company and a drug and device-focused company.

Photo:

brendan mcdermid/Reuters

By

Julia Carpenter

Biography

@juliaccarpenter

julia.carpenter@wsj.com

Updated Nov. 12, 2021 2:50 pm ET

Johnson & Johnson

is planning to become two companies. Current shareholders can expect to own shares in both when the breakup happens.

On Friday, J&J said that household names like Band-Aid, Tylenol and Johnson’s Baby Powder will be housed in one consumer company. In the other will be the pharmaceutical side of J&J that has thrived in recent years and just this year launched its own Covid-19 vaccine.

Investors will be given shares in both Johnson & Johnson, now the drug and device-focused company, and also stock in another company, the consumer business. The specific terms of how many shares will be given to existing J&J shareholders wasn’t disclosed Friday.

Current shareholders should expect the second company will have a new name, which investors will see in their accounts, and the legacy business will continue to go by J&J.

“I do think the company is making it user-friendly in terms of the transaction,” said Mike Bailey, director of research at FBB Capital Partners. “So I think the next step is for investors to think, ‘Let me roll ahead the clock. I’m going to have these two companies—do I want to own both? Do I want to sell one of them?’ ”

The decision by J&J is hardly unique. Just this week,

General Electric

announced it will break apart into three public companies, with the three companies centered around aviation, healthcare and power.

For shareholders in J&J or any company going through a breakup, there are a lot of questions to think about. Here are some answers.

What happens to my shares?

Right now, not a lot. Because the breakup won’t happen overnight—rather, it’ll likely take a year or more, Mr. Bailey said—most investors can sit tight and plot their longer-term strategy.

“In the short term, it’s ‘hurry up and wait,’ ” Mr. Bailey said. “In theory, there’s nothing you have to do.”

What if I owned fractional shares?

“It’s no different than if you’re a whole shareholder,” said Jonathan Waite, senior equity analyst at Frost Investment Advisors. “Come the day they put as the ‘x’ date, you’ll have two companies in there.”

When it comes to planning strategy going forward, a lot of this depends on how many fractional shares you own, and in what company. For an investor building a very small portfolio primarily with fractional buys, the breakup could lead to greater diversification, Mr. Bailey said.

“In some ways, it complicates life: It adds another variable to that portfolio,” he said. “But on the flip side, it adds more diversification. Before, J&J was a basket of healthcare products. And now, you own a more traditional healthcare stock and now a consumer stock.”

What about my shares in the dividend reinvestment plan?

In the short term, nothing changes.

“They’re still paying the same amount, and I was pleased to hear that they’re going to maintain that same dividend payment,” Mr. Waite said. “That’s a good sign.”

But Mr. Waite also pointed out current J&J employees may have more specific questions as to how this split will affect people in different divisions within the future two companies.

“If you’re an employee and you have shares in that company—if you’re part of that consumer piece, especially—I think you have a lot of questions to be asking the powers-that-be,” he said.

What do I do come tax time?

J&J expects the move to be tax-free.

The only tax consequence an investor should expect would come from a sale is if they decide to unload one (or both) of the stocks they own. But for those who plan to keep the status quo, they shouldn’t expect any tax implications, Mr. Bailey said.

“For a buy-and-hold type of investor who wants to own a blue-chip company, you can just sit and wait,” Mr. Bailey said. “You had one company, and now you’ll have two.”

Write to Julia Carpenter at Julia.Carpenter@wsj.com

Copyright ©2021 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the November 13, 2021, print edition as ‘How Individual Holders Are Affected by the Split.’

ShareTweetPin

Related Posts

Cathie Wood says rising rates hit her strategy like an earthquake and cyclical stocks are next

by
March 21, 2023
0

Ark Invest's Cathie Wood said rapid interest rate hikes over the past year are now starting to hit cyclical pockets...

Potentially deadly fungus is spreading at an ‘alarming rate,’ CDC says

by
March 21, 2023
0

Candida auris is a yeast responsible for many infections. Resistant to most anti-fungal drugs, this fungus causes several deaths worldwide....

Bitcoin, ether build on recent gains as investors await Fed rate hike decision

by
March 21, 2023
0

Pedestrians walk past an advertisement displaying a Bitcoin cryptocurrency token on February 15, 2022 in Hong Kong, China. Anthony Kwan...

Home sales spike 14.5% in February as the median price drops for the first time in over a decade

by
March 21, 2023
0

Sales of previously owned homes rose 14.5% in February compared with January, according to a seasonally adjusted count by the...

GameStop stock soars after retailer posts first quarterly profit in two years

by
March 21, 2023
0

In this article GME Follow your favorite stocksCREATE FREE ACCOUNT A GameStop store operates in a strip mall on March...

Next Post

Wall Street analysts say these are some of the most 'underappreciated' stocks coming out of earnings

Amazon's $21 billion Rivian stake is a bet that innovation can help solve climate change

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

email

Get the daily email about stock.

Please Enter Your Email Address:



By opting in you agree to our Privacy Policy. You also agree to receive emails from us and our affiliates. Remember that you can opt-out any time, we hate spam too!

MOST VIEWED

  • WHO says Covid vaccine booster programs will prolong pandemic

    0 shares
    Share 0 Tweet 0
  • Forget Tesla — this auto stock is the one to buy right now, analyst says

    0 shares
    Share 0 Tweet 0
  • Spin or Split? AT&T Has a Big Decision to Make on Discovery Stake.

    0 shares
    Share 0 Tweet 0
  • Here’s how Carl Icahn is positioning for a possible recession in America

    0 shares
    Share 0 Tweet 0
  • Some lawmakers and their families are betting thousands of dollars on crypto

    0 shares
    Share 0 Tweet 0
  • Home
  • Trading News
  • Email Whitelisting
  • Privacy Policy
All rights reserved by tradingconcept.net
No Result
View All Result
  • Email Whitelisting
  • Home
  • Privacy Policy

All rights reserved by www.tradingconcept.net