2007-02-13 12:40:14 · 4 answers · asked by Thomas S 2 in Business & Finance ➔ Investing
the option will adjust correspondingly. For example, if you have the option to buy a stock at 20 dollars a share and another company comes and buys out the stock for 30 dollars a share, you still have the option to buy at 20. If it is a stock for stock transaction, you will have the option to buy the corresponding amount of the aquiring company.
2007-02-13 12:58:01 · answer #1 · answered by Katt_in_the_Hat 6 · 1⤊ 0⤋
The first answer you received is correct if the options are exchange traded options you own. When a company is bought by another company the exchange-traded options are adjusted to to require delivery of whatever the owner of 100 shares received in the buyout. If the owner received $30 per share, the option becomes a cash settled option requiring delivery of $3,000 if exercised for 100 times the strike price.
The second answer applies if you have employee stock options you received directly from your company. I believe the answer is correct, that the disposition of the options is negotiated by the two companies, but I am not certain.
2007-02-13 17:48:15 · answer #2 · answered by zman492 7 · 0⤊ 0⤋
you although have your stocks. yet at the same time as the deal incorporates giving new stocks to the stockholders of the gained organization (in change for his or her previous stocks), your stocks are "diluted" interior the adventure that there are easily more beneficial finished marvelous stocks. on the diverse hand, the newly enlarged organization is in idea precise properly worth more beneficial and ought to generate more beneficial earnings. How precise that theory works out relies upon on the expertise of the acquisition deal interior the first position. some deals paintings precise - at the same time as others fail miserably. in the adventure that your stocks are interior the gained organization, you'll acquire stocks interior the figuring out to purchase organization and/or earnings accordance to three formula.
2016-12-04 03:45:34 · answer #3 · answered by duperne 4 · 0⤊ 0⤋
it actually depends on the purchase agreement between the two companies. it could simply transfer as an option into the new entity or the new entity could require the purchased entity to clean up their capitalization/ownership structure before they buy it out. it really depends on the purchase agreement. if you can get your hands on that document, you'll find your answer.
2007-02-13 14:56:46 · answer #4 · answered by RMC 2 · 0⤊ 0⤋