When should you buy company stock, before or after an announced merger?

Answer 1

I assume you mean before or after the merger is consumated, because, obviously, you wouldn't knowingly be able to do it before the announcement, except by luck.

There's no absolute rule here. I think, normally, theres some benefit to buying before, because there may be a small value increase when the merger takes place. However, you also run the risk of the deal falling apart. So the answer depends on a number of factors:

1. How certain are you of the merger going thru?
2. How much would you value the shares if the merger fell apart?
3. How much of a discount or premium are the shares selling at, compared to the value of the combined company after adjusting for the merger terms?
4. Will the merger change the value of the company in some synergistic way?

Also remember that, if a merger is going thru, you have the option of buying EITHER of the merging companies, not just the one you want. If they other one is selling at a discount to what yours is, you could buy that instead, again, subject to the questions listed above.

Answer 2

Well, before, as the stock usually goes up after. Depends on the situation.

But how would you know about a proposed merger unless you had inside information? If you use this info, or alert others to it, you could be breaking the law.

Answer 3

If you did it before an announced merger that would likely be considered insider trading unless you could prove you had no prior knowledge of the merger.

Answer 4

usually before, it almost always worth more after the merger, but there are always exceptions to the rule....

Answer 5

before

Answer 6

before

Answer 7

before

Answer 8

once you're speaking about Perot's, you need to discover what Dell's going to furnish shareholders as a buyout and make your decision to that end. Congrats on a maximum sensible purchase!