Tracking stock

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Tracking stock, also known as letter stock and targeted stock,^[1] is a specialized equity offering issued by a company that is based on the operations of a defined business within the larger organization (such as, for instance, a wholly owned subsidiary of a diversified firm). Therefore, the tracking stock will be traded at a price related to the operations of the specific division of the company being "tracked". Tracking stock is typically limited, or has no voting rights.^[1] Often, tracking stock is issued to separate a high-growth (but initially, unprofitable) division from its parent company, while the parent company and its shareholders remain in control of the subsidiary's operations.