Stock Watch: Possible Spinoff Boosts eToys

The stock of online toy retailer eToys (Nasdaq: ETYS) had its second straight solid day on Thursday, gaining 2-3/8 to 33-3/4. After the markets closed on Wednesday, eToys announced that its wholly owned subsidiary BabyCenter, which offers information resources for expectant parents, is considering spinning off its Consumer Health Interactive Division.

The Consumer Health Interactive Division is billed as “a complete resource for health plans looking to use the Internet to attract and retain members.” The division’s current customers include Blue Shield of California, Oxford Health Plans and Sharp Healthcare. Spinning off BabyCenter, or selling it to a health-care company, will allow BabyCenter and eToys to focus on its core content and e-commerce businesses.

Thursday’s rise in eToys stock also came one day after the company announced a new three-year, $18 million marketing agreement with America Online. That news helped carry eToys stock up 7/8 to 31-3/8 on Thursday.

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