Spin-offs--they're all the rage on Wall Street.

But should investors play along? Another chance has emerged, in the form of

Westinghouse

(WX:NYSE). The lumbering conglomerate says it will spin off its old industrial businesses, leaving a mostly media business. The move is being hailed by Wall Street folks, but Westinghouse's stock has yet to respond. On Thursday Westinghouse lost + to 19 +.

The conventional wisdom is that Michael Jordan (not the cologne-balding-basketball guy, but the ex-McKinsey man running the Pittsburgh-based company) will successfully unlock the greatness of Westinghouse with his proposed spin-off. The new Westinghouse will become a media company with CBS, an array of radio and cable operations and Howard Stern behind the microphone. The old Westinghouse will have power generation turbines and other exciting stuff. Both companies are expected to have revenue of about $5 billion.

Part of the problem with this plan is that recent high-profile spin-offs have dropped off after early hype-filled action.

ITT

(ITT:NYSE), after getting investors all pumped about its plan to divide into three parts, has watched the combined price of the three companies underperform the stock market since the breakup last December.

AT&T

(T:NYSE) and its

Lucent

(LU:NYSE) spinoff (initiated in April) have also underperformed the stock market this year.

One trader said Wall Street supports the spin-off concept primarily to drive investment banking underwriting revenue, not necessarily to build shareholder value. And some companies do spin-offs to get the promotional support of Wall Street houses. Companies fret that they can't get institutional research and support if they are perceived as a bundled mass of confusing concepts. ITT said last year that the desire for dedicated research drove their spin-off strategy.

Now it is Westinghouse's turn. Buyer beware?

"Westinghouse has a long history of not getting a terrific reception to their restructuring programs,'' says James Solloway, director of research at Argus Research. "The moves they are making may ultimately prove successful, especially for the broadcast group. But this remains a company that really needs to prove itself to Wall Street. At this point investors are more interested in finding the momentum play than in looking at turnaround stories.''

By Dave Kansas