If you own stock in a company and it is bought out by another company what happens to your stock?

Question

Say I own stock in XM radio and sirius buys out xm what will happen to my stock? I know this hasn't happened nor has there been much talk of it but I was just wondering what would happen?

Answer 1

If that happens, your compensation will depend on how the deal was made. You may either get stock in the new merged company on a pre-defined ration (if managed via stock swap), or you'll get cash for your shares (if cash payment). If the latter, you'll most likely get more cash than the current value of your stock given the acquiring company will have to pay a premium.

Answer 2

Sometimes such things are a buy-out, and you get paid for your stock and you are no longer in the picture. Often it is a merger and there is negotiations, so many shares of this company will become one share of the new company and so many shares of the other company will be one share of the new company.

You don't have to worry about it, but I had one company that when I was on vacation, they did a reverse split for my class of shares, moved all the real assets to a subsidiary and sold that to another company, then left me and who knows how many others holding an empty, worthless shell that they then sold to a tin mine in Nevada. I went from having several tens of thousands of shares in a VOIP company to 1 share that is listed on my account as worth 8 one-ten thousanths of a cent. You won't fare so badly though.

Answer 3

Using your same scenario. Siri would go up in price and because of the expense to XM, their price would likely decrease. I say likely because in this case if the big buck's guys liked the connection, the buying company's stock would clime.

Answer 4

Then you would own stock in their company, or they would buy the stock from you and give you options.

Answer 5

yeah yet both the corporate had to spend a lot of money to purchase the corporate which offsets the benefit contained in the price of the recent company or they pay with inventory, that may shrink the % possession of your modern inventory, yet advance the basically accurate fairness - so as that cancels out also - the become hoping for benefit contained in the destiny is that the corporate it really is offered is worthwhile and which will upload value to all of us who owns inventory in teh organizations

Answer 6

Then you would own Sirius stock.

Answer 7

your stock should have bumped up some you need to check in to it you may have a little extra funds if so shoot some my way your friend just playing good luck on your stock man you need to check it out asap