Avoiding Crimson Wine Spinoff

Leucadia National Corporation (LUK) is spinning off its wine business, Crimson Wine Group. 

Here are the spinoff details:

  • For every 10 shares of LUK, investors will receive one share of Crimson.
  • The distribution date is expected to be February 25th. The shareholders of record or record date of distribution is February 11th.
  • Crimson will trade OTC and will not be listed on any exchanges.

Although, it might be tempting to buy the unloved, discarded, and small spinoff Crimson, I am avoiding it.

  • Wine industry is very competitive.
  • Crimson has not been profitable for years and is barely profitable this year.

Crimson is a very small part of Leucadia. So, it should not have much of an effect on Leucadia’s stock price either.

Here is the form 10 for Crimson Wine Group.

Disclosure: I do not own Leucadia. 

2 thoughts on “Avoiding Crimson Wine Spinoff

  1. Clearly you haven’t done your work. CWGL wasn’t profitable because of the interest bit needed to pay on a loan with LUK. That loan along with the interest is gone and CWGL is profitable without any improvement in its operating performance. Additionally wine may be competitive but great vineyards and land are irreplaceable assets and CWGL owns some the very best in the industry.

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