The company was preparing investors for some initial ‘selling pressure’ as it expected to be sold off by DAX index fund investors and those SI investors who no longer desired lighting exposure. Additionally, many were concerned about the European economy and about the company’s ability to properly restructure itself in the highly competitive and evolving lighting space. It seems those fears were a tad overstated though and while the name did drop a bit (~-4%) initially, it quickly recovered and has since been able to hang onto its ~15% gains. It even attracted a few ‘Buy’ ratings from Wall Street at banks such as UBS and HSBC.
It’s still early, but Osram’s success as an independent company could act as validation for Siemen’s strategy to shed certain non-core assets. CEO Peter Loscher has previously stated that the company would like to slim down a bit and shed some assets. We would certainly welcome another spinoff!
Check out all of our Siemens/Osram coverage here.
Disclosure: Author holds no position in any stock mentioned.
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