tracking stock


Shares issued by a company which pay a dividend determined by the performance of a specific portion of the whole company. Tracking stock differs from a spinoff in that it does not represent or require any change in business structure. Holders of tracking stock are considered to hold equity in the parent company and not the specific entity represented by the tracking stock. Tracking stock is often set up by companies that have several diverse divisions, both so that investors can take a share in a division of their interest, and so that the performance of these divisions can be tracked in terms of shareholder interest.
A company will sometimes issue a tracking stock when it has a very successful division that it feels is underappreciated by the market and not fully reflected in the company's stock price.

Use tracking stock in a sentence

You should always try and follow a tracking stock to see what information you can learn from how it goes.

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The tracking stock that Isaac had in Apple proved to be a great win for him when the newest version of the iPhone was released.

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Talia lost all the money she had invested in the company because she had tracking stock in their oil division, which was forced to close.

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