for billions. The stock price jumps up to $5.50 on this news. The volume is sky-high on this stock. The news includes the fact that the purchasing company will untimately be going private. What should I do? It's Friday. Can I expect this stock to continue to go up and up until the deal between the companies is a done deal? Or is it probable that the buy-out company will offer share-holders somewhere around $5.50
per share??? (COMS) What would you do? Experts only please.
2007-09-28 11:18:39 · 6 answers · asked by apples 3 in Business & Finance ➔ Investing
The board of directors has already approved the deal. Bain Capital will buy it for $5.30 per share. The current stock price is $4.94. You can't expect the stock to go above $5.30 unless another bidder jumps in. Since the board has approved the deal, this is unlikely.
You have to decide if you are better off taking the current price or waiting for the deal to close and getting a little more. If you sell now, you also have transaction costs. If you wait, I believe that the money will be sent to you as a dividend -- meaning that you may not have transaction costs. Talk to your broker about these costs.
2007-09-28 11:28:17 · answer #1 · answered by Ranto 7 · 0⤊ 0⤋
There is no guarantee. If the stock jumps to a price close to the price being offered by the buying company then investors probably believe the deal will go through. If it goes above the offer price investors may believe a better offer will come along. Shareholders have to approve the deal. If they do that then its probably going to go through at the offer price. The stock price is probably going to lag that offer price. If you want to wait around for a few months for the closing you would get the offer price. If its an unsolicited offer, a hostile takevoer, there could be a series of lawsuits between the two companies. If the board has neglected their fiduciary responsibility in some way handling the deal or the the price they agreed on decided to be inadequate then it could put the company in play. Then they may have to hold an auction for the company and allow other bidders.
2007-09-28 13:30:45 · answer #2 · answered by jeff410 7 · 0⤊ 0⤋
If the parent company is private, then the deal would be for cash. In other cases, stock may be a part of the deal as well (like BOT/CME) If they offer $5.5 per share, then that is as high as it will go. There may still be some movement in the stock, however. Traders will be applying a discount to the stock (i.e. it would trade for less than $5.50) if there is fear that the deal may not go through. There may be a premium applied (i.e. it would trade for more) if there is thinkinig that another buyer may come in and offer more. Likely though it will linger around $5.50.
2007-09-28 11:29:27 · answer #3 · answered by EZ Traders 3 · 0⤊ 0⤋
Hello there. Well, I don't got all the info to make a good guess. But from what I know I can say.. I can't see how it will hurt if you just wait and see. If it does keep going up, great! If they buy out, you wont lose money on that either.
As I said I could use a few other things, but would exspect them to stay public as far as their market goes.
It may even stay the same as your first company, but everything else in the company will change depending on the new owner.
I would wait, hope to keep it.
2007-09-28 11:35:18 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Actually, there are FCC rules about foreign ownership in media. It's not a stock issue, as much as a foreign ownership of media issue. 7%, while far from a majority stake, is significant.
2016-05-21 01:01:24 · answer #5 · answered by maryjane 3 · 0⤊ 0⤋
you're probably better off holding the stock for awhile - a 38% jump before commissions and taxes isn't enough to think about retiring on
2007-09-28 13:15:10 · answer #6 · answered by Anonymous · 0⤊ 1⤋