The pricing of a Honeywell (HON +1.67%) carve-out juiced the stock of the storied industrial company on Tuesday. After the company provided crucial financial details for the soon-to-be independent Quantinuum that morning, investors signaled their approval by collectively trading the stock up by 1.7%. That was good enough to beat the S&P 500 index’s 0.6% rise on the day.
A cutting-edge IPO
Honeywell has priced its planned initial public offering (IPO) for Quantinuum (which, as the name implies, is a quantum computing business) at $45 to $50 per share. It’s aiming to sell roughly 21.05 million shares, which would bring in as much as $1.05 billion in gross proceeds.
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The announcement came less than three weeks after Honeywell filed an S-1, a foundational IPO registration document, for Quantinuum. In it, the company revealed that JPMorgan Chase unit J.P. Morgan and Morgan Stanley are leading the syndicate that will take the unit public.
Honeywell, which will hold a stake in Quantinuum of slightly over 49%, certainly has timing on its side. Investors are eager to own shares of quantum companies — not only are they considered by many to be the future of powerful computing, but they’ve also been the target of direct federal financial assistance and involvement exceeding $2 billion.
Today’s Change
(1.67%) $3.80
Current Price
$231.72
Key Data Points
Market Cap
$144B
Day’s Range
$230.62 – $235.91
52wk Range
$186.76 – $248.18
Volume
6.6M
Avg Vol
3.9M
Gross Margin
38.06%
Dividend Yield
2.03%
Mr. Market is hungry
Given that level of excitement, it might surprise some to learn that there aren’t many quantum stocks available for investment now. The arrival of Quantinuum will be impactful on that basis alone, and the involvement of the well-known Honeywell should boost confidence in the company’s viability.
I wouldn’t buy Honeywell simply because of its relationship to Quantinuum, but I think the industrial giant is making a smart move by retaining that large ownership stake.
JPMorgan Chase is an advertising partner of Motley Fool Money. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Honeywell International and JPMorgan Chase. The Motley Fool has a disclosure policy.
