DuPont Spinoff Qnity Jumps On First Day of Trading; Will Join S&P 500 After Public Debut
The DuPont spinoff is hoping to score a bump from the AI boom
DuPont de Nemours is not a name you'd likely expect to hear in the same sentence as "semiconductors." Yet, for decades, the company's electronics division has made billions by catering to the detailed steps that make one of humanity's biggest technological marvels possible.
Still, its been largely excluded from the recent boom in fortunes in the tech industry, especially in semiconductor names like Nvidia, Broadcom, and Advanced Micro Devices. That's part of why the chemicals giant decided to part ways with its electronics division, hoping that a spinoff of this ever-important business would attract attention.
On Monday, that experiment began as DuPont Electronics was spun out of the business and became Qnity, listing on the New York Stock Exchange with the ticker Q. And although it's new to markets, it won't be treated like it. In fact, the company scored addition to the S&P 500 index, replacing Eastman Chemical at the start of trading on Tuesday. (It was joined by another spinoff, Solstice Advanced Materials, a product of Honeywell's materials spinoff.)
TheStreet interviewed Qnity CEO Jon Kemp a few weeks ago before the company's big day. At the time, Kemp said that the company expects to book $4.6 billion in net sales in 2025, with sales growing in the order of high single-digits. The company also indicated it would bring home adjusted EBITDA margins of about 30%.
Most of that revenue and growth is coming from the semiconductor industry in particular, while a smaller sum has been derived from "packaging chips, printed circuit boards, and assembly." In particular, Qnity's exposure to the data center and AI theme, which now directly represents 15% of its business and is its fastest-growing segment, could capture the attention of individual investors and institutions -- much in the same way that General Electrics' respective spinoffs did.
The news saw one-time parent DuPont de Nemours fall over 57% in trading. Qnity was up more than 4% intraday.
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