Explain the following: Tracking Stocks

A tracking stock is a type of common stock issued by a publicly held company to track the value of one segment of that company. These stocks track the financial performance of a specific business unit or operating division of a company, rather than the operations of the company as a whole. Tracking stocks are generally issued by a parent company in order to create a financial vehicle that tracks the performance of a particular division or subsidiary. When a parent company issues a tracking stock, all revenues and expenses of applicable division are separated from parent company's financial statements and bound to the tracking stock. Often this is done to separate a high-growth division from large losses shown by the financial statements of the parent company. The parent company and its shareholders, however still control operations of the subsidiary. These stocks carry dividend rights tied to the performance of a targeted division without transferring ownership or control over divisional assets.