A Surprising Market Reaction To Netgear’s Arlo Spin-Off Pricing

  • Netgear is selling roughly $200M or 11M+ shares in their IP security camera business Arlo.
  • The markets were disappointed and sold off substantially.
  • Since Netgear keeps 84% of Arlo after its IPO (and additional allocation), this alone is worth up to $1B if the IPO price holds up in the market.
  • Given the post-IPO’s cash bounty of $550M+, this values their two remaining businesses at roughly $500M or just over half their sales, which seems too cheap to us.

Source: A Surprising Market Reaction To Netgear’s Arlo Spin-Off Pricing – NETGEAR, Inc. (NASDAQ:NTGR) | Seeking Alpha