Vapor Group Inc (VPOR)

[Topchef]

With a spin-off you receive the stock of another company as a dividend. That gives you position in two companies. A lot of time both the parent and the spin-off can see benefit. By separating them the two companies, they become pure plays that people can jump into. Typically they buy quick and in boat loads. Early on relax, some investors may want nothing to do with the spin off company or the parent company after the news is released. Their will be a lot of selling and buying going on as investors scramble to take the positions they want.

Generally, the spin-off does better, because it is the new to the market and was formerly overshadowed by the older larger business. By the time spin-offs are announced it might be too late to really get good value like we are in the mid 2's. In this case Simple Cork will be a new product on the market and it might get a little crazy when its ticker finally goes up.

(Negative side of spin off news)
A typical trader that has no interest in the company other than trying to flip a quick profit will jump at possible spin off news... These traders want to get in now. Than they will wait for the news to hit and then sell to the people piling in, and not wait until the spin-off is completed.