2007-10-24 14:49:59 · 4 answers · asked by invincibleian 1 in Business & Finance ➔ Investing
This is not a homework question :)
I just found out that a company whose stock has been static and virtually worthless is probably going to be bought by another. I am wondering what will happen to the value of my previously almost worthless stock. Still worthless, or is there hope?
2007-10-24 14:55:42 · update #1
There would normally be a share swap, and you would finish up with shares in B. The only thing you need to worry about is the retention of an economic share.
If B feels that the number of shares you will then hold is uneconomic, (they take into account the cost of transferring shares) you probably will be given the opportunity to purchase more shares, or an offer will be made for them to purchase your shares.
2007-10-24 15:01:56 · answer #1 · answered by DavidC 4 · 0⤊ 0⤋
Most often, you receive X shares of B stock for every Y shares of A stock you own. The 'exchange rate' is determined by the purchase agreement, but is usually similar to the relative value of the shares. It is also possible your shares will be bought back for cash.
2007-10-24 22:03:52 · answer #2 · answered by STEVEN F 7 · 0⤊ 0⤋
Well, it's possible you'll get 0.003 of a B share for each A share, but with A that close to zero, you'll more likely get a check for whatever B thinks your A stock is worth.
2007-10-24 22:15:32 · answer #3 · answered by Anonymous · 0⤊ 0⤋
They will give you cash, stock in B or a combination of both.
2007-10-25 02:52:08 · answer #4 · answered by Anonymous · 0⤊ 0⤋