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.