Honeywell Isn't Going to Let a Little Breakup Ruin Its Growth Plans
Investors are usually happy when a company can pull off one big goal and do it well. So Wall Street was almost certainly expecting Honeywell (NASDAQ: HON) to focus all of its attention in the immediate future on what amounts to a massive corporate restructuring. Then management threw a wrench into the works by announcing plans for a $2.16 billion acquisition. What is going on?Wall Street tends to go through periods when companies buying up other companies to create ever-bigger conglomerates is seen as the natural path to success. Then, the script flips and investors start pushing for massive companies to spin units off and "unlock value," under the theory that the various business units would perform better as focused, standalone entities.Image source: Getty Images.Continue reading
Investors are usually happy when a company can pull off one big goal and do it well. So Wall Street was almost certainly expecting Honeywell (NASDAQ: HON) to focus all of its attention in the immediate future on what amounts to a massive corporate restructuring. Then management threw a wrench into the works by announcing plans for a $2.16 billion acquisition. What is going on?
Wall Street tends to go through periods when companies buying up other companies to create ever-bigger conglomerates is seen as the natural path to success. Then, the script flips and investors start pushing for massive companies to spin units off and "unlock value," under the theory that the various business units would perform better as focused, standalone entities.
Image source: Getty Images.
