Why Old Republic's Shares Plunged

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of multiline insurer Old Republic (NYSE: ORI  ) were getting hammered by investors today, falling as much as 12% in intraday trading.

So what: Investors in Old Republic had been excited about the idea of a spinoff of its Republic Financial Indemnity Group. That group was the unprofitable segment that backed consumer and mortgage loans and got ravaged during the financial and housing meltdown. But it wasn't to be. In a press release on Friday, the company announced that it's cancelling the spinoff, stating cryptically, "These decisions respond to objections raised by certain stakeholders that RFIG's separation from Old Republic would be disadvantageous to their interests and expectations."

Now what: The bad news is clear here: Investors wanted to see Old Republic move forward, free of its mortgage-insurance ball and chain, and that hope is now gone. On the other hand, the stock of the new entity was going to be spun off to Old Republic shareholders anyway, so in theory at least, either way shareholders ended up with the downside from RFIG.

Old Republic scheduled a conference call for tomorrow to discuss the move, so shareholders may get some more clarity out of that.

Want to keep up to date on Old Republic? Add it to your Watchlist.

Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Fool contributor Matt Koppenheffer has no financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter, @KoppTheFool, or on Facebook. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1923748, ~/Articles/ArticleHandler.aspx, 10/20/2016 3:50:49 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,166.22 -36.40 -0.20%
S&P 500 2,141.03 -3.26 -0.15%
NASD 5,240.27 -6.15 -0.12%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/20/2016 3:35 PM
ORI $18.32 Down -0.04 -0.22%
Old Republic Inter… CAPS Rating: ****