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Why Are Companies Like Johnson & Johnson and GE Announcing Corporate Splits
Posted
January 14, 2022
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22
January 14, 2022
22
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1:08Now PlayingMany companies, including General Electric, Toshiba, and, most recently, Johnson & Johnson, have announced partnership splits. Check out the video to learn more!
Welcome back to Bold TV with Alyssa Flores. Be sure to like, comment, and subscribe to Bold TV for all things Bold.
What is causing this? Corporate splits normally occur in one of two ways, according to Michael Farr of investment firm Farr, Miller, and Washington. The first is that investors feel the two firms don't have a strong enough link. The second reason for the breakup between Johnson & Johnson and GE was that the company's worth was not fully recognized by the market. The value of a group of companies that specialize in one thing is higher than the value of a single company that does a little bit of everything. Despite their differences, these businesses are supporting one another by doing what is best for both sides. They might always team up again in the future, but for now, they're concentrating on their own growth.
What are your thoughts on corporate splits? Are you in agreement with these two scenarios? Do you believe the firms would be better off if they split up? Let us know your thoughts in the comments below.
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