Tracking stock or targeted stock are specialized equity offerings issued by a company that is based on the operations of a wholly owned subsidiary of a diversified firm. Therefore, the tracking stock will be traded at a price related to the operations of the specific division of the company being "tracked". Tracking stock typically has limited or no voting rights. Often, the reason for doing so is to separate a high-growth division from a larger parent company. The parent company and its shareholders remain in control of the subsidiary's or unit's operations.
During the dot-com bubble, some companies that predated the bubble identified their Internet operations as high-growth divisions that would benefit from a tracking stock. The best-known example is The Walt Disney Company, which issued a tracking stock for go.com. At around the same time the bubble ended, Disney retired the tracking stock. AT&T (AWE) and Sprint Corporation (PCS) also established tracking stocks for their cellular telephone operations, but neither of these tracking stocks is still outstanding. Liberty Media (NASDAQ: LMCA, LMCB, and LMCK) had tracking stocks for Liberty Interactive (NASDAQ: QVCA and QVCB after 07 October 2014 symbol changes from LINTA and LINTB), Liberty Capital - formerly LCAPA and LCAPB on Nasdaq, Liberty Starz - formerly LSTZA and LSTZB on Nasdaq, and Liberty Entertainment - formerly LMDIA and LMDIB on Nasdaq, at various times since going public. However, on 25 September 2011, Liberty Capital and Liberty Starz could no longer be traded leaving only Liberty Media and Liberty Interactive as separate companies. Therefore, no major U.S. companies had tracking stocks until 9 August 2012, when Liberty Interactive issued tracking stock for itself using its current symbols and Liberty Ventures LVNTA and LVNTB on the Nasdaq.
Among other examples, in 1999 Quantum Corp. issued tracking stock in two subsidiaries: its DLT and Storage Systems Group (DSS) and its Hard Disk Drive Group (HDD). Two years later, in 2001, Quantum sold the Hard Disk Drive business to Maxtor and redeemed the HDD tracking stock.
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