AMMO shares fall after plan to split into 2 listed companies

Shares of AMMO Inc. POWW,

fell 10.1% in morning trading on Monday after the online arms seller announced a plan to split into two publicly traded companies, one that includes its firearms market and the another which includes its ammunition and components business. The stock’s sell-off comes a day after it closed at an eight-month high, which followed a three-month soar of 62.5%. Post-separation, Outdoor Online Inc. will consist of and its related online businesses, and will be led by current AMMO CEO Fred Wagenhals, while Action Outdoor Sports Inc. (AOS) will retain the current ammunition and ammunition components business, which includes the Streak, Signature and Blackline brands. Who will lead AOS will be announced later. AMMO said the reasons for the planned separation include providing separate investment opportunities to allow for more appropriate valuation of companies, to allow each company to better focus its capital allocation strategies and to enhance the strength of the brand of each company. The stock is down 1.4% year-to-date, while the S&P 500 SPX,
fell by 10.4%.

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