Why Citrix Systems, Inc. Stock Dropped
What: Shares of Cytrix Systems (NASDAQ:CTXS) closed Wednesday down 10% after the software virtualization company revealed its business model for the next two fiscal years, including the spinoff of its GoTo family of products.
So what: Recall that when Citrix announced strong third-quarter results last month, management promised this update was on the way, specifically to keep investors in the loop regarding progress in its ongoing transformation intended to reposition the business for sustained long-term growth.
Specifically, Citrix says as a result of its operations review, it determined "a spinoff of the GoTo family of products into a separate public company is in the best interest of all stakeholders, allowing both companies to enhance its strategic focus and respective competitive positions, while permitting Citrix to improve operational efficiency." In a separate press release, Citrix noted the transaction is expected to be completed in the second half of 2016 as a tax-free spinoff to Citrix shareholders. The new company will be made up of GoToAssist, GoToMeeting, GoToMyPC, GoToTraining, GoToWebinar, Grasshopper, and OpenVoice. Collectively these products totaled unaudited revenue of $600 million in the trailing 12 months ended Sept. 30, 2015.
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