I own stock in a small buisness, if that buisness gets bought out, do I make $$ or loose $$, and why?

Question

I heard a rumor that Kinross Gold might be looking to buy out Bema Gold cp., I own stock in Bema and want to know how a buy out would effect my stocks...I'm new to the whole investing thing so some clearity would be very helpful, thanks

Answer 1

depends on how much it's bought out for, and what you paid for the stock. If your share of the purchase price is more than you originally paid for the stock, then you make money. If not, you lose money.

If you're new to investing, you might consider trying something like mutual funds.

Answer 2

investing on buyout rumors is a BAD idea. You should only own a stock that you think will make you money. IF it a good buy and it gets bought out, then you win. BUT if its a trashy stock, nobody is going to want to buy it. if its balance sheet is wrecked, or it really has no future growth prospects, then a bigger company isnt going to want it and You shoudn't neither.

Gold is an interesting play though. the price of gold is going to continue to go up as inflation fears hit eastern countries like india.
there gold is a more safe play than hold large amounts of rupees.
Personally i like KRY more than your Bema corp (BGO)
BGO has 467K of debt and 627K of assets. That is a LOT of debt to be running, and the copmpany isnt making any money (110K loss this year). unless you KNOW something that isnt obvious from the income statement or the balance sheet, i would sell.
I think its about time to be investing in some back to school stocks. apple is ready for a hard bounce so is intel as millions of freshman pack up and head off to college.

Answer 3

GENERALLY, and I stress not always, the bid is greater than the share prices. If it isn't, then the company will have no incentive to take the bid.

However, if the company is in distress, the company may consider offers below the share price, to avoid bankruptcy, for example.

You would be paid in cash, or perhaps shares in the purchasing company (that would probably be a 'merger').

Answer 4

Generally went a company gets bought out companies pay for everything it owns plus its customers base and company image. This ususally means that you'll make money of the merger, depending on how good the company is doing and its potential.

Answer 5

Typically a buyout occurs and the offer exceeds where the stock is currently trading. However, whether or not you make money depends on what your cost basis is.