Pepsico, (PEP) down today

Discussion in 'Stocks' started by hughb, Feb 9, 2012.

  1. hughb

    hughb

    After announcing it will keep Frito Lay. Last year when the rumors were swirling that it would spin off Frito, the stock jumped. Does anybody have any idea why the market wants Pepsico to spin off Frito Lay? It seems like Frito is a cash cow for Pepsico, so it doesn't make sense to me.
     
  2. Market's don't like conglomerates. So when companies spinoff divisions the market generally like it. Investors who didn't like the potato chip business can now buy PEP. If you like the potato chip business and the cola business you can still own both.
     
  3. Frito Lay can trade at a higher P/E multiple than PEP. :cool: