HSN, Inc. (NDAQ: HSNIV) complted its spin-off from IAC Interactive (NDAQ: IACI) today as a part of Barry Dillar's move to unlock value for shareholders. HSN is a leading multi-channel interactive retailer with some of the most dynamic brands and experiences in the retailing industry. As an independent company, investors are hoping that shares will be valued much higher than it was as a part of IACI. However, some experts aren't so sure that value will be unlocked...

Traditionally, spin-offs have outperformed the S&P 500 by a wide margin during their first three years as a public company. The reason is simply because parent company shareholders often have little appetite for the new spin-offs while they are also loaded with debt and have no fall-back. This combination of factors often lead to a sell-off during the first year that leaves room for enterprising investors to jump in and realize substantial gains as the stock returns to a fair value.

Chief Financial Officer Tom McInerney said in an interview that the value of the new companies should be much more than it is now and he hopes that it will be very obvious in a year. However, some analysts aren't so confident in additional value being unlocked. HSN was considered the division that was most undervalued, but analysts insist that HSN's problems are significantly worse than expected. Other businesses under the IACI umbrella are also continuing their decline early on.

In the end, these spin-offs may present opportunities to shareholders, but not in the obvious way. Many believe that the shares of these new companies, like HSNi, will fall substantially early on. Only after this initial fall will investors have a good entry point to get in and profit. The reason? Parent company shareholders will likely sell the new spin-offs while the performance of the companies continues to deteriorate in these tough markets.

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Epicor Software Corporation (NDAQ: EPIC) may be in for a shake-up after an activist hedge fund unveiled a sizable stake in the software firm. Elliott Associates disclosed a 9.9% stake in the company and is inquiring about possible strategic alternatives in a Schedule 13D filing with the SEC. The hedge fund has been steadily purchasing shares since June, but acquired the majority of its stake during the past month. So, is this a stock investors should watch?

Activist hedge funds like Elliott Associates are known for pushing companies to pursue strategic alternatives to unlock value for shareholders. Strategic alternatives refer to efforts designed to sell all or parts of a company, spin-off business divisions, change the capital structure, or pursue a share buyback or special dividend. All of these efforts are designed to return immediate value to shareholders like Elliott Associates and YOU!

Epicor Software Corporation designs, develops, markets and supports enterprise application software solutions and services primarily for use by mid-sized companies and the divisions and subsidiaries of larger corporations worldwide. The company's products include back office applications for production management, supply chain management, retail management and financial accounting, as well as front office customer relationship management and service management.

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Pershing Square's William Ackman is well known on Wall Street for being an agitator for change. His controversial views on bond insurers made him billions on the short-side while a recent well-timed bet on Longs Drug Stores (NYSE: LDG) netting him several hundred million in mere weeks. Earlier this week, Pershing Square reported its most recent holdings in a Schedule 13F-HR filing with the SEC, which details each of its holdings.

Ackman's largest purchase was in Dr Pepper Snapple Group (NYSE: DPS) in which he acquired over 21 million shares at an average price of $24.70 per share. The activist investor also nearly doubled his stake in the troubled Wendy's (NYSE: WEN) restaurant chain at an average price of $27.10 per share. And finally, many investors are now well aware of Ackman's well-timed purchase of Longs Drug Stores at an average price of $43.50 just weeks before its acquisition by CVS was announced.

Ackman also reduced his holdings in Cadbury Plc and Target Corporation (NYSE: TGT), but still holds a total of nine stocks with a total value of $2.4 billion through his Pershing Square Capital Management hedge fund and has returned over 30% annually. The hedge fund currently holds, among other things, Barnes and Noble, Sears Holdings Corp, Borders Group, and a short position in MBIA Inc. Investors looking to piggy-back on this legendary investor may want to consider purchasing some of his recent holdings like Wendy's or Dr Pepper.

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