Latest news:

Spin offs are popular, but they can also be dangerous

Jun 8, 2022

Redacción Mapfre

For investors, spinoffs—turning a division into a publicly traded company by issuing newly created stock—can unlock value. Theoretically, it allows the pieces of a corporation to trade at higher valuations than they do trapped inside the company, where they might not fit together properly. In practice, they can be complex, and in some cases, detrimental to long-term shareholder returns.

“Everyone thinks spinoffs are an easy way to make money, and they’re not,” says Jonathan Boyar, CEO of Boyar Value Group, in an article in Barron’s. “You have to be very careful and outline the different things to look for to see if a spinoff is attractive.”

Boyar has a point. For activist investors, spinoffs can bring substantial gains. A 2019 study by the Boyar Value Group analyzing nearly 250 spinoffs over a 10-year period found that a spinoff’s largest returns happened between seven and 12 months, reaching maximum returns of 7.1% after one year of completion. Long-term investors do less well, as returns tail off after that, with the average spinoff in Boyar’s study underperforming the S&P 500 by 2.7% a year on average.

Click here to read the full article (available via subscription)

High volatility in stock markets: why it happens and how to act

In recent weeks, international markets have faced their most challenging period since 2020. In a situation marked by surging volatility, emotions like fear take center stage in the minds of many investors, and market movements shift from linear to exponential. Such situations, although not frequent, do tend to recur periodically, and it’s important not to get swept up in the negative atmosphere or act impulsively with a short-term mindset, as the experts at MAPFRE remind us.

The dollar's hegemony under scrutiny

The US dollar’s role as the world’s reserve currency, historically underpinned by institutional credibility, financial depth, and trade dominance, is now facing mounting structural challenges that go beyond short-term economic fluctuations.

The tariff war shakes the global economy and casts doubt on U.S. debt

The tariffs are a problem that’s marking a major shift in the economic relationships we've built and developed over the past few decades. The U.S. President is using them as a tool to bring manufacturing back home and, in turn, boost government revenue through both direct and indirect taxation. But the ends don't always justify the means, and in pursuing these goals, the U.S. is now facing slower economic growth and rising inflation.