- NYSE:AIV plummets by 87.51% at the opening bell as the company reshuffles its organization.
- The split sees two new companies formed with each side controlling a different part of the business.
- AIV is the lucky company to be replaced by Tesla in the S&P 500.
NYSE:AIV saw its stock fall 87.51% to open the trading session on Tuesday, but it has nothing to do with the performance of the company and everything to do with a planned reorganization. Shares closed the trading session at $5.04 down from Monday’s closing price of $40.34 as the reshuffling of the apartment building Real Estate Investment Trust or REIT resulted in a new 52-week low for AIV. It is a shocking number to see as REITs are generally among the more stable equities that investors can own, but there is a reason for the steep dropoff.
AIV essentially split its company into two different branches: one side will remain as AIV and focus on the development and redevelopment of potential future apartment building locations. The other side will be known as Apartment Income REIT (NYSE:AIR) and will be the apartment management REIT that investors have come to know. The tradeoff means that AIR began to trade today at around $40, where AIV left off on Monday. For every share of AIV each investor has, they also received a share of AIR, which means in the end, investors are positive overall.
AIV stock news
AIV will still operate as a REIT, just with a different focus, so the AIV investors used to know is now what AIR currently is. Confusing? It may have been simpler to have the AIR REIT remain as AIV, but in the end, as long as investors know they have not lost out then all should be forgiven. AIV will also see itself removed from the S&P 500 in the next quarterly rebalancing, to make way for the electric vehicle giant Tesla (NASDAQ:TSLA).
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