This is the process of dividing a company by which current shareholders receive additional shares in another company. In most cases, the value of the shares of the old company falls by just the value of the new shares received.*
*For convenience and speed of settlements, instead of new shares (which are not yet listed in Libertex), customers receive the cash equivalent of the value of new shares.
For example: As a result of spinning off part of AT&T's business, a new company will be created, and the former owners of AT&T shares will receive WBD shares (approximately 0.25 WBD shares for every 1 AT&T share).
Thus, the owner of 100 shares of AT&T will receive an additional 25 shares of WBD and will become a shareholder in both companies.