Do spun-off companies trail the market in their first trading days, and does any shortfall last?
Study 41 · Inconclusive · recorded 6 October 2026 · answer: Not settled · full paper with figures
The question
When a business is separated from its parent and listed as its own company, do its shares fall behind the market in their first three trading days, and if so, is the drop made back over the following weeks, as selling by holders who did not want the shares would predict, or does it stay?
Rules fixed before the result
Fixed in advance: a selling dip that recovers if the three-session range lies below zero, the later range above zero and half the gap is made back on average; a lasting markdown if the three-session and half-recovery ranges lie below zero; no early shortfall if the three-session range excludes 3 points or more; else inconclusive. It needed 50 events on 40 companies in 35 groups, and power to detect a 4-point early shortfall and an 8-point recovery, which it had.
Data and method
On development data to 2022, 62 companies separated from their parents, late 2013 to 2021, were each compared with a large-company index fund over their first three trading sessions and sessions four to twenty: selling by holders who did not want the shares should be made back, a market markdown should stay. The same measures three, six and nine months later served as a check. Ranges come from redrawing groups of events sharing a company or a month 2,000 times.
The answer
The result is inconclusive: neither explanation is established, as we had expected at low confidence. Over their first three trading sessions the 62 newly separated companies trailed a large-company index fund by about 1.5 percentage points on average (95% range: 4.4 behind to 1.2 ahead); over sessions four to twenty, and on a measure of whether half the early gap was made back, both averages were near zero and both ranges hold zero. A three-session shortfall larger than about 4.4 points is not supported, while smaller ones remain compatible, so this is not a statement that nothing is there. Every minimum set in advance for the main comparison was met, and no side check contradicts it.
Main estimate
-0.015 fraction (95% range -0.044 to 0.012), from 62 observations
What it changes
No plan changed. Under the rules set in advance, an inconclusive result closes this line of work on the first weeks after a separation, with its reason recorded, and no sharper design is proposed.
What remains uncertain
Study thirty, the earlier one-year study of these companies, read them in one development sample that includes 2020's turmoil. Dating from the first trading close misses earlier trading and a new listing's first-session move; comparable companies as benchmark show no contradiction. The ranges were wider than the plan assumed, so the smallest shortfall the study could detect was larger than planned; the later-dates check's 10 groups, below its minimum of 35, mattered only for a dip or markdown answer.
How it was made
Run took 51 minutes; independent code review: approve; the recorded calculation reruns to the same result.
Fingerprints
plan 22af33ce8bda30a3933115fe2405ab7205fb5b3fcc584da93d6a26ae66c23c38 result 53996fef6148f520d307268935bfdd068460a9b095fefec171d57431b71bb5fb
Exploratory work on development data; not a performance claim.