Quick Thoughts on the New Dow Spin-off

Summary

New Dow (DOW) began trading yesterday and quickly traded up 5% to $56. Last week, it traded in the high $40/low $50 range in the “when issued” market. While most spin-offs initially sell off, that hasn’t been the case with New Dow. Why? 1) DOW is actually replacing DWDP in the DJIA. So there won’t be forced index selling. 2) Analyst have been very bullish with price targets of at least $62. 3) Cramer says buy New Dow. This is always good for a quick pop.

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