Stock market is a good strategy from a business standpoint

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Reference no: EM133298714

Topic: On February 28 2019, Gap Inc announced that it would split into two companies, in effect spinning off its Old Navy Brand, which had been its most profitable division for a long time. Investors had demanded the split, and quickly rewarded it by a huge uptick in the company's stock-price.

Question 1: Perform a thought experiment. Would the market similarly reward Apple in 2022 if it announced that it was spinning off its IPhone Division? Why or why not?

Question 2: Also, aside from the stock market implications, is this a good strategy from a business standpoint? Remember, now the Banana Republic and Gap stores will be part of a different company, and will not be able to combine resources, such as real estate deals, distribution, contractor-relations and IT.

Reference no: EM133298714

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