The Motley Fool Discussion Boards

Previous Page

Learning to Invest / Terms, Definitions, & Jargon

URL:  https://boards.fool.com/a-new-fool-wanting-to-know-which-is-better-to-12037539.aspx

Subject:  Re: acquuisitions Date:  2/24/2000  5:35 AM
Author:  BrentMaloney Number:  563 of 2244

A new fool wanting to know which is better, to hold stock in the acquiror or acquiree?

Probably the acquiree since you will almost a;ways get a premium over current stock price and the shares will be converted to the acquirer's eventually. However if one doesn't own the stock when deal is announced, wait some time since arbs usually rush in and bring stock at or near premium price.

Not clear why stock drops for acquiror, beyond obvious cash outlay. Isn't it a good thing to acquire another.

Companies tend to have redundancies and it takes time to figure out how many positions new company will require. Management styles need to be able to mesh. Any type of assimilation takes time especially if both companies are large. The market could also feel company overpaid for takeover.

Brent
Copyright 1996-2022 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us