Honeywell-backed Quantinum Inc.’s stock price rose as much as 19% to more than $71 apiece in Thursday’s listing. The quantum company’s stock closed well above those highs with an increase of less than 1%, giving it a market capitalization of $15.66 billion. On Wednesday night, Quantinum’s roughly 28 million shares were priced at $60 per share, above the previous expected range of $53 to $55. This public offering raised $1.68 billion. Quantinam is listed on Nasdaq under the ticker symbol QNT. The IPO was good news not only for Quantinuum, but also for the club’s name, Honeywell International. The industrial conglomerate will benefit as the majority shareholder in Quantinuum, holding 48% of the total voting rights. However, as an investor in Honeywell, the club will not acquire a stake in Quantinum. This transaction was not a separation, unlike other recent separations that resulted in FedEx Freight (separated from FedEx) and Qnity Electronics (separated from DuPont). Like other Quantum stocks, it’s highly speculative, so we don’t intend to buy Quantinum as part of our portfolio. For Honeywell, the deal with Quantinuum is an incremental victory because it allows it to gain valuation for a business whose value previously had investors only guessing. Quantinuum was formed in 2021 through the merger of Honeywell’s then-Quantum Solutions group and Cambridge Quantum. This has never been a big source of revenue for Honeywell, as quantum computing as a whole is still in its infancy. Honeywell hasn’t said much about what it will do with the Quantinum stake now that the offering is complete. However, Quantinuam CEO Rajeev Hazra told CNBC on Thursday that Honeywell “remains a very disciplined shareholder” and “continues to collaborate as we have in the past on agreements regarding access to our supply chain, manufacturing and customer base.” He added: “Over time, they will address this asset and monetize this asset.” The investment in Quantinuum gives Honeywell a hand in one of the fastest growing technology areas: quantum computing. This nascent industry is attracting the attention of scientists, researchers, and Wall Street. This technology uses the principles of quantum mechanics to solve complex problems that are impossible with traditional computers. Many quantum stocks that are already public, including Rigetti, IonQ, and D-Wave, have risen significantly this year. But certainly they were very unstable. The group soared late last month after the Commerce Department awarded $2 billion in grants to quantum computing companies. Quantinum was one of the companies scheduled to receive federal funding. Honeywell stock soared on the May 21 announcement and would rise further on various updates leading up to Quantinum’s IPO. At the time, we didn’t think Honeywell deserved so much attention in quantum news, so we sold some and booked a profit on May 26th. There are still many unknowns about quantum computing. “The application is still being developed,” Matt Kennedy, senior strategist at IPO research firm Renaissance Capital, said in an interview with CNBC. “There are a lot of possibilities right now as to what the market will look like in a few years. So, let me be clear, (the market) is not established,” Kennedy said, adding that the industry is “looking for commercialization, and we expect to get there within five years.” Quantinum is not a major part of our investment thesis, so it is fine for our Honeywell International stock. But the IPO is another step in the company’s once expansive efforts under CEO Bimal Kapoor to streamline operations and monetize non-core businesses. In the past three years since Mr. Kapur took the helm, the company has gone through a multi-step process, including spin-offs and divestitures. The final part is that later this month, Honeywell Aerospace will become an independent publicly traded company under the ticker symbol HONA. The company’s remaining automation business will be renamed Honeywell Technologies. HON will be the stock ticker and Kapur will be the CEO. This separation is the catalyst we have been waiting for to allow each business to pursue its own path and unlock more shareholder value in the process. Honeywell stock hit an all-time high in early March, but has remained relatively flat since late 2021. We call this “purgatory spin.” HON 5Y Mountain Honeywell International 5 Years At Wednesday’s Investor Day, Honeywell Aerospace unveiled its long-term financial goals ahead of its June 29 spinoff. Management said it expects annual adjusted earnings before interest and taxes (EBIT) to reach at least $6.5 billion by the end of 2010. Analysts estimate Honeywell’s aerospace segment’s operating income in its current structure will be $6.2 billion in 2029, according to FactSet. Honeywell Aerospace CEO Jim Currier said becoming an independent company “frees up a lot of power…a dedicated management team focused on one strategy, one mission, rather than the different missions of being part of a conglomerate.” In an interview with CNBC on the sidelines of the event, Carlier said he expects “the commercial air transport market and the defense and space sector” to grow the most. (Jim Cramer’s charitable trusts are long HON, DD, FDXF, FDX, Q. See here for a complete list of stocks.) 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