Tracking stock
originally posted: 11/22/2006 reposted: 2/18/2011 This post has not been recently reviewed or revised by the author and may be out of date. If in doubt, please send a new question or ask for an update.
Q: What is "tracking" stock? Please illustrate your answer.
A: I have no personal experience with tracking stock and therefore nothing to add to the academic descriptions and examples commonly available. A short description would be a stock of a subsidiary or division of a larger company. Tracking stock can be a real issued and traded stock or just an illustrative measurement like a "phantom stock". This seems unlikely to be a "hot topic" in consumer finance unless you happen to work for a conglomerate company that uses a tracking stock of your division as the basis of your performance compensation. In that case, you might be concerned about the details of stock options or similar employer-provided benefits. Otherwise, there is little difference to an individual between a tracking stock and a regular stock that happens to be a spin-off of a larger company.
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