Q: Do I have this right that well is doing a spinout next year. What does this do to the value of the company and will it affect the share price? Would you be interested in investing in the spinout? Also has Well been purchasing back their shares? if so how many or what percent in 2025?
Thanks Dave
Thanks Dave
5i Research Answer:
The timing is good as Wellstar is more of an AI focused software company, so allowing it to be a bit of a pure-play trading on its own makes sense. Technically, it shouldn't change a whole lot for WELL's fundamentals as they plan on retaining much of their ownership but if bringing Wellstar public helps it to be valued more appropriately, this should benefit WELL and also provides some liquidity which has its advantages for all companies. Markets sometimes like 'cleaner' stories as well, so separating the two companies out might help on that front.
On share buybacks, we don't show WELL as doing much in the way of material buybacks for the last few quarters.