SAN DIEGO - Illumina Inc. (NASDAQ:ILMN), a global leader in DNA sequencing technologies, has announced the upcoming spin-off of GRAIL, a healthcare company focused on early cancer detection. The spin-off is scheduled for June 24, 2024, with GRAIL expected to be listed on Nasdaq under the ticker symbol "GRAL."
Illumina's shareholders are set to receive a pro rata dividend of GRAIL's common stock, with one share of GRAIL being distributed for every six shares of Illumina stock held as of the close of business on the record date, June 13, 2024. Illumina will retain a 14.5% stake in GRAIL post-distribution.
The company has declared that the distribution will not result in shareholders recognizing gain or loss for U.S. federal income tax purposes, except concerning cash received instead of fractional shares. Shareholders are advised to consult tax advisors for further guidance on the tax implications of the spin-off.
Trading of GRAIL shares on a "when-issued" basis is expected to begin on or about June 12, 2024, on Nasdaq, transitioning to "regular way" trading on June 25, 2024. Illumina shares will also be available in two markets during this period: "regular way" under the ticker "ILMN," which includes entitlement to GRAIL shares, and "ex-distribution" under the ticker "ILMN WI," without the entitlement.
Illumina's CEO, Jacob Thaysen, expressed confidence in GRAIL's role in advancing genomics innovation and improving human health. Shareholders will receive further details on the spin-off and GRAIL's business through an Information Statement before the distribution date.
The spin-off is subject to customary conditions, and while Illumina expects to complete the transaction as planned, there are forward-looking statements that involve risks and uncertainties. These are detailed in both Illumina's and GRAIL's SEC filings.
InvestingPro Insights
As Illumina Inc. (NASDAQ:ILMN) prepares for the spin-off of GRAIL, it's important for investors to consider the company's financial health and market performance. According to recent data from InvestingPro, Illumina has a market capitalization of $16.44 billion and a Price to Earnings (P/E) ratio of -12.71, reflecting challenges in profitability in the past. Despite these figures, analysts are predicting that the company will be profitable this year, which could be a pivotal point for investors considering the upcoming GRAIL spin-off.
An InvestingPro Tip highlights that Illumina operates with a moderate level of debt, which may provide some financial flexibility as they proceed with the distribution of GRAIL shares to their shareholders. Additionally, while the company did not pay dividends, the distribution of GRAIL stock could be viewed as a benefit to investors, particularly given that Illumina will retain a 14.5% stake in GRAIL post-distribution.
In terms of recent performance, Illumina's one-year price total return has seen a significant downturn of -49.7%, indicating a period of volatility for the stock. Still, with the company's focus on genomics innovation and the anticipated profitability this year, the spin-off may offer a strategic opportunity for growth.
For investors seeking more in-depth analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/ILMN. These tips could provide further guidance on Illumina's financial standing and future prospects, especially in light of the planned spin-off. Moreover, by using the coupon code PRONEWS24, investors can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription to InvestingPro, where they can access a comprehensive list of 7 additional tips and metrics tailored to Illumina.
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