JNJ and Kenvue

[gman57]

Hello,

My sister  just called me on advice about JNJ splitting into 2 companies. I sold my JNJ long ago.  Apparently you have a choice whether you want to receive shares of the new company or not which sounds strange to me.  I'm just starting to research it but what are the folks that own JNJ here doing.  Interested on your thoughts about the split. Looks like you have to make a decision by 8/18/23? ADD: looks like the split happened in May? My sister is not "investor experienced" so she may not be explaining this to me correctly.

[liftlock]

I am not an owner of JNJ stock and have no opinion on the matter.  However, I just received the following communication from one of my advisory services which focuses on owning stocks trading at a discount to their intrinsic value:

"We not going to participate in the Johnson & Johnson offer to exchange JNJ shares for shares of Kenvue (KVUE). KVUE is not at an attractive price.

[gman57]

From what I've learned so far -- JNJ will exchange $100 of JNJ for $107 of Kenvue. **IF** you want to own Kenvue.


www.jnj.com/johnson-johnson-launches-exchange-offer-for-separation-of-kenvue-inc

www.envisionreports.com/jnjseparation/2023/JNJSeparationjul31/index.html?voting=true


It sounds like if they don't have enough people that take the offer (under subscribed) they're going to give you shares of Kenvue as a distribution?  Am I reading that right?

ADD: I also read other splits like this were over subscribed so you may not even get an exchange you think you would. i.e. You want to trade 500 shares but if it's over subscribed you may only get  100 of the 500 exchanged?

[steelpony10]

gman57 ,

        www.youtube.com/watch?v=xTLvcVhG0ck

[gman57]

Thanks for the link.  Not much new on it other than recent earnings and company breakout.   I've been reading and there is talk of the the big boys buying JNJ and shorting KVUE trying to arbitrage the deal and lock in 7%+. That's something I don't understand the workings of. Then there is Cramer saying he dumped JNJ from his charitable trust because he doesn't want anything to do with the lawsuits etc... (talc).

This is how I'm looking at it. If I was thinking of reducing my JNJ holdings anyway (before all of this) I'd do the exchange for that amount to get the 7% difference and immediately sell KVUE.  If I wasn't looking at reducing JNJ I just keep what I have.   I'm going to tell my sisters to keep what JNJ they have and maybe lighten up some JNJ (if they have a large position) to reduce the lawsuit exposure. If they do lighten up do it via the exchange. I'll also tell them don't blame me for any outcome that isn't positive...LOL.