# ABT splitting



## Homerhomer (Oct 18, 2010)

http://www.theglobeandmail.com/globe-investor/abbott-labs-to-split-into-2-companies/article2206130/

Trading up 10% on the news, I like how the diversfied company is right now, not sure if I would be a big fan after the split especially with one of the companies having majority of the revenues from Humira, which comes off the patent in 5 years.

Thinking of selling it today, there may be a bit of short squeeze which will fizzle in the next little while.


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## Abha (Jun 26, 2011)

I own as well and thinking of selling too. The chart indicates a little more upside so I'll wait a few weeks before deciding.


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## Homerhomer (Oct 18, 2010)

Unfortunately was too busy today and forgot about it, by now the profit from the news have evaporated, will see how it goes over the next little while.


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## gibor365 (Apr 1, 2011)

Sorry for stupid question...but why do you want to sell it?

I also hold ABT and was thinking that this is a good news for long term holding... also ABT is a pretty solid blue-chip with not bad dividend and DGR  
I was thinking to keep ABT forever....

What this split really means for my account? Won't they give shares of new company (with some ratio0 and still we'll hold regular ABT shares. (at least that what is doimg ONR)?


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## Homerhomer (Oct 18, 2010)

gibor said:


> Sorry for stupid question...but why do you want to sell it?
> 
> I also hold ABT and was thinking that this is a good news for long term holding... also ABT is a pretty solid blue-chip with not bad dividend and DGR
> I was thinking to keep ABT forever....
> ...


From my point of view ABT was purchased as a long term hold, and the reasons were diversity across product lines, geographical, good growth projections, and obviously the dividends. As I already wrote I would have little interest in holding the pharmaceutical company after the split (with one major drug that is expiring in few years), and the other just won't be as diversified anymore.

Technically you are not loosing anything with the companies being divided, you will receive shares of both, and generally dividing the companies adds value, but as with everyting there are some exceptions, look at encana split into encana and cenovus, especially encana struggles big time from the shareholder point of view.

It's just my gut feeling, as of right now ABT seems to fit well into my portfolio, not sure how it would fit after the split with one company being pure pharmaceutical.


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## Abha (Jun 26, 2011)

My plan was to sell to capture the enthusiasm of the split and to buy in at a lower price again.

I just want to keep the gains and then hope it goes lower.

It's very similar to Altria splitting into Phillip Morris a few years ago. The dividend will be split between the two companies and you won't lose anything in that regard.


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## gibor365 (Apr 1, 2011)

Abha said:


> My plan was to sell to capture the enthusiasm of the split and to buy in at a lower price again.
> 
> I just want to keep the gains and then hope it goes lower.
> 
> It's very similar to Altria splitting into Phillip Morris a few years ago. The dividend will be split between the two companies and you won't lose anything in that regard.


But Altria split into PM was good for shareholders.... 
What price do you thing to sell ABT?


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## Abha (Jun 26, 2011)

There's always some fluctuations. Let's say the market tanks and takes Abbot with it. I would want to sell before that happens, and then rebuy the company at a lower price and hold until the split which won't happen until late 2012.

I'm just trying to stay cash heavy in this environment.


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## Financial Cents (Jul 22, 2010)

Can't wait to get shares in both companies


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## gibor365 (Apr 1, 2011)

Financial Cents said:


> Can't wait to get shares in both companies


Me 2  Also waiting for COP promised split...


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## gibor365 (Apr 1, 2011)

A lot of different views on ABT split in seekingalpha.com 

Some articles more pessimistic:
http://seekingalpha.com/article/302198-abbott-still-a-dividend-growth-stalwart

some more optimisic:
http://seekingalpha.com/article/302...e-spliced?ifp=0&source=email_investing_income

in your opinio is split a good or bad think for income investors?


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## Financial Cents (Jul 22, 2010)

Long-term a great thing.

Short-term, bumps and bruises due to re-structuring. 

Glad I'm a shareholder


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