How does an acquistion affect shareholders?

Question

If you are a shareholder in the acquired company, what happens to your stock? Does it remain tradeable?

Answer 1

The acquiring company buys all the stock and it ceases to be traded on its own. In exchange you may receive stock in the acquiring company or the combined company. Thats not taxable until you sell that stock. Or, the shareholders of the acquired company may receive cash for their shares. In that event it is taxable unless those shares are in some kind of tax deferred account, such as an IRA. Or they could receive a combination of cash and stock in the acquired or the combined company.

Answer 2

Usually, you will be given stock in the new company, and your old stock will become worthless.
Usually, you come out slightly ahead, or, at least, even.