Netflix and Tyco try winning by splitting

September 19, 2011: 2:10 PM ET
Netflix stock, Qwikster

Click the chart to track Netflix's stock.

NEW YORK (CNNMoney) -- Merger Monday has recently become Splitting Monday. The latest companies to adopt the "divide and conquer" strategy are Netflix and Tyco International.

Netflix plans to split its DVDs-by-mail unit from its streaming-video business, rebranding the DVD service as Qwikster. The initial market reaction was positive as Netflix shares gained 4% in early-morning trading. But investors' enthusiasm quickly dimmed and by midday, Netflix (NFLX) stock was in the red, down more than 2% for the day.

Also on Monday, Tyco International (TYC) announced that it will split into three publicly traded companies, each focusing on a separate segment:

- North America residential and small-business security functions;

- Flow-control products and services business;

- Commercial fire and security business.

Tyco CEO Ed Breen is hoping the sum of those parts will be worth more than the whole:

"Importantly, the new standalone companies will have greater flexibility to pursue their own focused strategies for growth -- both organic and through acquisitions -- than they would under Tyco's current corporate structure. This will allow all three companies to create significant value for shareholders."

Netflix can't afford a streaming content war

Tyco shares advanced 2.5% on the news.

These are some of the popular themes on StockTwits this Monday:

nemrut: #Qwikster seems like clever name for $NFLX DVD svc tho seems to be a 'hasty' move likely to confuse customers more than anything else.

fromedome: Important to remember $NFLX DVD shipments already peaked and are in decline. No matter what, it's NOT the future.

ivanhoff: Yes, having 20mil subscribers is a huge asset, but only if they figure out a different way to monetize it. Until then, $NFLX will be boring.

EddyElfenbein: In two months, shares of $NFLX went from $304 to $154. Now THAT'S what I call Qwikster. $$

Benzinga:$TYC Tyco CEO Breen says acquisition isn't our plan; says spinoffs could be acquired on split.

ReformedBroker: $TYC is splitting up into another set of three companies...it's like the brooms carrying buckets from Fantasia at this point.

lamonicabuzz: Tyco deja vu. $TYC to split into 3 again after already spinning off $TEL & $COV. $TYC up 7.5% pre-market. Time to buy golden shower curtain? To top of page

Index Last Change % Change
Dow 17,776.12 -200.19 -1.11%
Nasdaq 4,900.89 -46.56 -0.94%
S&P 500 2,067.89 -18.35 -0.88%
Treasuries 1.93 -0.03 -1.48%
Data as of 6:09am ET
Company Price Change % Change
Bank of America Corp... 15.39 -0.13 -0.84%
Apple Inc 124.43 -1.94 -1.54%
General Electric Co 24.81 -0.31 -1.23%
Microsoft Corp 40.66 -0.30 -0.74%
Intel Corp 31.27 -0.19 -0.60%
Data as of Mar 31
Overnight Avg Rate Latest Change Last Week
30 yr fixed3.79%3.82%
15 yr fixed3.02%3.02%
5/1 ARM3.14%3.13%
30 yr refi3.87%3.90%
15 yr refi3.11%3.11%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates: