2006-07-31 00:31:52 · 6 answers · asked by ellerkampbrian 2 in Business & Finance ➔ Investing
It depends on what the terms of the buyout are. If the company is in distress, it likely not going to be a good deal for the stockholders. If the company has a product or service that will make tons of future earnings, it should be a very good deal for the stockholders. Beware, however,of any buyout that involves stock in the larger company and a cash settlement. If 30% of the agreed purchase amount is paid in cash, you will be liable for capital gains tax on the deal.
2006-07-31 00:40:37 · answer #1 · answered by Overt Operative 6 · 3⤊ 1⤋
It depends on the conditions of the sale. The large company may offer cash for the stock. If so, the offer is voted on by the stockholders. The offer amount has to be higher than the market value, or there would be no point in agreeing to sell.
The larger company may offer stock in the larger company to trade for stock in the smaller company. The buyers would have to show some benefit, in a case like that, to the stockholders, or they will not vote to sell.
2006-07-31 07:43:29 · answer #2 · answered by regerugged 7 · 0⤊ 0⤋
Usually the small company gets bought out for a pretty penny and the investors do alright. Otherwise they wouldn't sell!
They can issue shares of the larger company to replace the small company's share or they can just give you cash in lieu.
http://www.nabloid.com
2006-08-01 01:26:50 · answer #3 · answered by ulchka 3 · 0⤊ 0⤋
Price usually rises and a premium is offered to stock holders.
2006-07-31 07:37:41 · answer #4 · answered by Dr Dee 7 · 0⤊ 0⤋
stock will be turned into cash or that company's stock or debt - end of story.
2006-07-31 09:21:26 · answer #5 · answered by vegas_iwish 5 · 0⤊ 0⤋
it depends always their goodwill in the market
2006-07-31 08:11:28 · answer #6 · answered by Anonymous · 0⤊ 0⤋