When a company A is being taken over by company B, how are the shares affected? Do both company A and company B shares rise or only the Company A rise and Company B falls?
2007-08-18 10:56:27 · 3 answers · asked by JustWonder 2 in Business & Finance ➔ Investing
upon the news release, stock A will increase in price. this because, stock A will either get more money from the takeover or will be taken private. in the mean time, stock B has moderate price movement, pretty much to do with analysts here and there try to justify their purchase. after a while, (if there is synergy between stock A & B), stock B will slowly increase especially when they report profits increase from additional reported earnings from its new holdings.
2007-08-18 14:05:06 · answer #1 · answered by BigBen 5 · 0⤊ 0⤋
Initially the company being taken over would probably rise and the acquirer's shares would probably fall. After that it just depends on how things unfold. Most takeovers dont work because they try to take over companies that are too large, buying something they cant afford. And a merger should help a company do what they do better. Often that doesnt happen.
2007-08-18 13:15:37 · answer #2 · answered by jeff410 7 · 0⤊ 0⤋
Justwonder, if I knew, I'd be a zillioaire.Every buyout is different.
2007-08-18 11:02:44 · answer #3 · answered by TedEx 7 · 1⤊ 0⤋