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Questions tagged [corporate-acquisition]

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3 answers
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Musk bought Twitter with $13b loans - why is *Twitter* liable for this debt rather than Musk?

Elon Musk bought Twitter in late 2022 for $44 billion. My understanding is that $13b of the total price was financed by bank loans. So, why is Twitter itself on the hook for the loan repayments? If I ...
Paul Y's user avatar
  • 149
4 votes
2 answers
468 views

What is the (tax) aquisition date for stocks aquired via merger?

I own stock that is soon going to be acquired for a mix of cash and stock. I have held the old company stock for a while (qualifies as long term capital gains) but I am likely to need the money soon. ...
Konstantin Tarashchanskiy's user avatar
4 votes
2 answers
420 views

How is it legal for Twitter to dilute the share of one specific shareholder?

According to the latest news: Musk, the chief executive of Tesla and the world’s richest person, had offered to buy the social media platform for $43.4bn, arguing he wanted to release its “...
JonathanReez's user avatar
  • 5,862
4 votes
1 answer
133 views

Hostile takeover bid to turn company private - how does it work (current context: Musk / Twitter)?

With regard to the current coverage of Musk announcing his wish to turn Twitter into a private company, I'd appreciate some clarification: Twitter stock, according to Yahoo Finance, is owned by ...
Zubo's user avatar
  • 487
0 votes
1 answer
3k views

What happens to stock warrants on acquisition?

I am invested heavily in warrants within a mid-cap biotech company. Due to the cash position of many large-cap biotechs like Moderna and Pfizer, I am assuming they will start to make some acquisitions ...
Maciek's user avatar
  • 129
7 votes
1 answer
1k views

Why would being acquired lead management to not issue guidance or field questions?

Activision Blizzard reported earnings recently. Activision Blizzard misses on earnings, sees user decline in Q4 Activision Blizzard is also being acquired by Microsoft. This is cited as a reason to ...
Allure's user avatar
  • 2,730
12 votes
2 answers
5k views

How to avoid taxes when a stock you own is taken over in a cash deal?

I own shares of company A in a personal, non-tax advantaged account. Company A is being acquired by company B at a premium in an all cash deal, but I'd like to avoid the taxes associated with selling ...
Everyone_Else's user avatar
1 vote
1 answer
184 views

Is a public company immune from hostile takeovers if at least half of its issued shares are treasury shares?

I used to play Railroad Tycoon Deluxe (1993), the second video game in the groundbreaking Railroad Tycoon series. In the game, every player operates a railroad company (the default scenario is set in ...
Flux's user avatar
  • 17.1k
0 votes
1 answer
98 views

How can one debt-finance a corporate takeover and then transfer debt to the company? [closed]

I'm reading about the Glazer family's takover of soccer club Manchester United nearly two decades ago. They apparently debt-financed their takeover, borrowing hundreds of millions of pounds, and some ...
Allure's user avatar
  • 2,730
0 votes
1 answer
38 views

Owning OTM Calls on a company that was acquired

I own 10 $stay calls exp 7/18 but they were purchased this week and the ticker no longer exists. Am I screwed? I can't find anything online.
Bob Johnson's user avatar
0 votes
3 answers
187 views

How do SPAC targets (acquired companies) benefit from additional cash upon merging with a SPAC?

Hope this is the right place for the question. There are many articles on SPACs explaining how things work, so I'll cut straight to the question: I have read and heard people say that a SPAC deal can ...
Jean Monet's user avatar
1 vote
2 answers
59 views

Can a small company buy a big company with stock without borrowing?

I know a company can buy another company with stock. Doesn't that mean that even a tiny company can buy a bigger company with its stock as long as the big company will accept?
Darby Bond's user avatar
6 votes
1 answer
1k views

Can a company cancel vested employee stock options on acquisition?

My company stock option plan contains the following language: In the event that the company is subject to an Acquisition, outstanding awards acquired under the plan shall be subject to the agreement ...
Option Holder's user avatar
25 votes
3 answers
9k views

Can someone just forcefully take over a public company for its market price?

I am working for a Fortune 500 company. A recent drop in our stock price caused, let's say, some startle. Following that, one of our executives said in a global Q&A session in response to one ...
Zaibis's user avatar
  • 361
1 vote
1 answer
514 views

Slack - Salesforce buyout, What happens to the Options?

I hold three call options of Slack. Average price bought: 15 * 3 = 4500; Book Value: 45 The current price for each call option is $18, and the stock is trading at $43. According to the press release:...
Thalapathy's user avatar
1 vote
1 answer
69 views

The term "debt financed" as a source of payment for doing the Acquisition, is it?

I have a question for word phrase "debt financed" in Acquisitions but for my best understanding, I would like to ask a question on random example: Let's say we have three companies: CompanyA,...
Ciaran's user avatar
  • 11
1 vote
1 answer
99 views

Could the stock price of the target firm fall when a buyout is announced?

I've read this: Why do stocks gap up after a buyout is announced? I'm wondering if it's possible for the opposite to occur: could the stock price of a target firm fall when a buyout is announced? What ...
Flux's user avatar
  • 17.1k
2 votes
1 answer
655 views

Can a company buy a bigger company?

Let's say company X is worth $10 billion by market capitalization. Can it acquire a company that's worth $20 billion? It sounds impossible, but I would like to know what is actually preventing company ...
Allure's user avatar
  • 2,730
-2 votes
3 answers
386 views

Why don't companies issue more shares to create corporate empires?

Why can't companies grow ever-larger into corporate behemoths by funding a large number of acquisitions using shares? Shares are like currency that the company can mint on its own. Surely management ...
Flux's user avatar
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0 votes
1 answer
119 views

How do stock manipulators gain control of dormant shell companies traded on over-the-counter markets?

I was reading this official SEC press release: SEC Microcap Fraud-Fighting Initiative Expels 379 Dormant Shell Companies to Protect Investors From Potential Scams. Excerpt: The existence of empty ...
Flux's user avatar
  • 17.1k
0 votes
1 answer
299 views

OTM, Long Put Options in an All-Stock acquired company - did they die?

I have a small, few hundred dollar position in an OTM Strike ($22) put option expiring Jan. 2021 for KEMET (KEM). The company was acquired by Yageo recently. Yageo trades on the Taiwanese stock ...
Zack Adam's user avatar
1 vote
2 answers
95 views

Is there a difference between selling right before a merger and selling right after a merger?

Suppose company A and B are going to merge, and the merger is guaranteed to take place very soon. In the merger deal, shareholders of A get shares in the combined company, and some cash. Suppose I own ...
Flux's user avatar
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1 vote
0 answers
100 views

How can greenmail go wrong?

I understand that, Greenmail is the practice of buying enough shares in a company to threaten a hostile takeover so that the target company will instead repurchase its shares at a premium. https://...
TJNI4fmgOSiB2yFX's user avatar
0 votes
0 answers
24 views

How would recent GBP exchange rate fall effect $ efforts to buy foreign-owned UK assets?

US-GBP exchange rate has been at its lowest since the mid-80s. That presumably means it's been cheaper to buy UK assets with dollars. Let's say I have dollars and I want to acquire a UK company. Let'...
markling's user avatar
-4 votes
3 answers
136 views

If you buy asset in one country that is 2/3 owned by an investor in another country, what currency do you pay in?

I'm in the US. I want to acquire a UK-registered firm that is 2/3 owned by foreign investors. The UK firm is private. What currency must I use to make the purchase? Where is it written that this is ...
markling's user avatar
-2 votes
2 answers
2k views

Bank financing vs. Owner Financing (Dan Pena QLA, Company Acquisitions)

I have a question about small detail in QLA program from Dan Pena about company acquisitions and business loan lending in general. My question is related to the 03:45 (minute:second) moment of the ...
Andrew0's user avatar
  • 47
0 votes
1 answer
120 views

Advice on shares after redundancy and merger

The company I worked for recently made me redundant. I have shares in the company which recently went through a merger and now my shares are worth half of what they were prior to the merger which was ...
Syrinx's user avatar
  • 1
1 vote
0 answers
155 views

Put Option Settlement for All-Cash Acquisition with a CVR?

How are in-the-money put options settled when an acquisition price includes a contingent value right (CVR) that causes the stock to trade above the acquisition price? Example: Alder Bio acquired for ...
Rod Schrock's user avatar
1 vote
1 answer
97 views

Liability of the acquiring company

Company B was bought by company A. A few years after company B was sued for things it did before its acquisition. Is company A always responsible for all the fines and damaged caused by the ...
kukit's user avatar
  • 113
2 votes
2 answers
397 views

How are app sales/acquisitions taxed in the US?

Hypothetical scenario: I identify a gap in a company's product offering. I, as an independent developer, write a desktop, web, or mobile application that bridges this gap, and I contact the company in ...
Zac's user avatar
  • 123
2 votes
2 answers
1k views

What happens to a listing when a company is acquired by another?

AGN:NYSE was acquired today by AbbVie Inc, and lets assume that they bought the whole 100% of the company, now my question is would the acquired company be delisted from stock exchange and "merged" ...
Ante P's user avatar
  • 23
1 vote
2 answers
272 views

How do shares work when a startup is acquired?

I'm trying to estimate the value of stock options for a startup company which might get acquired in the near future. The problem is that I don't know how to incorporate the shares into the formula. ...
Adam Arold's user avatar
0 votes
1 answer
105 views

What Happens to OTM Puts Following a Cash Aquisition?

Say I purchase OTM puts with a $5 strike and the underlying company is acquired through a tender offer that pays $19.00 cash per share. My contracts are accelerated and adjusted to reflect the new ...
reauxtrader's user avatar
0 votes
0 answers
56 views

If I have stock that is unregistered at the time of a company buyout does my stock automatically register?

I was a contractor for a small public company for which I received stock compensation. There is a fee to register the stock so I am waiting to see if the stock ends up being worth anything before ...
slaphshot33324's user avatar
13 votes
1 answer
4k views

Acquisition - what happens to stock? [duplicate]

It was announced in October of 2018, that IBM will acquire Red Hat (RHT) for 190 per share. I have shares of RHT. Current price is in the 180 range. What will happen next? Will my shares be converted ...
djdy's user avatar
  • 233
0 votes
1 answer
55 views

How to square a rising share price with the company diluting the value of its existing shares [duplicate]

Company A's share price in the market continues to rise while at the same time, the company keeps announcing that they are issuing new shares for multiple M&A transactions. How is this possible ? ...
B Chen's user avatar
  • 1,029
2 votes
1 answer
524 views

What happens to the shares (of company A) in a "brokerage account" when company A gets bought?

I understand what happens to the shares of a company when the company is bought. What is not clear to me is if I own those shares through my account in a brokerage firm (e.g. Vanguard, Schwab, eTrade),...
B Chen's user avatar
  • 1,029
3 votes
1 answer
2k views

Do I need to sell my shares during a merger proactively

I hold shares in the publicly traded company I work for. This company is now being acquired via a cash merger by a second company. They put out a press release expressing their intent to buy all ...
buddybubble's user avatar
2 votes
1 answer
136 views

Why did ESL need to pay $5.2Billion for Sears Holdings?

Related to this question. Yes, I know that the operations of a big company isn't directly related to personal finance, but understanding this seems an important part of investing, for instance SHLD ...
user avatar
2 votes
1 answer
168 views

Tender offer - offer price vs. market price

I recently acquired Pacific Biosciences shares, which Illumina has offered to purchase 1.2 billion dollars of, at 8$ per share. After this announcement, the share rose at 7.56$ per share. Is the price ...
Robin's user avatar
  • 121
4 votes
2 answers
610 views

Red Hat acquired by IBM

I have few questions in light of recent news IBM to buy Red Hat Why would Red Hat's price be going down? Is it because some people/organisations had the stock on hold and decided to sell it instead ...
MMT's user avatar
  • 681
1 vote
1 answer
83 views

Acquisition Stock Holder Approval

I am working on a research project on acquisitions/mergers. I have been reading the details of Amazons acquisition of Whole Foods. In the articles that I'm reading, I see that Whole Foods shareholders ...
user1154644's user avatar
2 votes
2 answers
201 views

Selling options on acquisition

I've been trying to understand this hypothetical scenario wherein a company in which you own options is acquired. In it, the author posits you own .67% and 20,000 shares ($2 strike price, $4 share ...
Ben's user avatar
  • 203
1 vote
2 answers
6k views

What happens to a PUT contract for a company that is sold above the strike price and before expiration?

I'm thinking of selling long dated put contracts for a company that I believe may be acquired before the expiration date. I'll use SNAP for my example. What would happen to in the following situation? ...
Mr. B's user avatar
  • 167
1 vote
1 answer
57 views

ANDV/MRO merger options

In the ANDV/MRO merger, ANDV shareholders can request MRO shares, cash, or a blend of both. What are the cap gains implications? I'm thinking that exchange of ANDV to MRO shares would trigger no cap ...
tingalaya's user avatar
0 votes
1 answer
86 views

Where do I find information around stock swaps?

Where can I track which stock has been swapped for another, and at which ratio? Below three swaps that happened in the past years: SolarCity (SCTY) stock got swapped for Tesla stock (TSLA). Whole ...
brt's user avatar
  • 1,256
2 votes
2 answers
391 views

"New Disney" what does that mean for me as Disney shareholder?

Recently Disney and Fox decided to merge and create a new company called "New Disney" 21st Century Fox And Disney Stockholders Approve Acquisition By Disney What does that mean for me as a "disney ...
Swizzler's user avatar
  • 1,283
7 votes
1 answer
379 views

Why do big companies buy out sinking ships? (closing/bankrupt companies)

Hoping I'm in the right place to ask this question. Why do companies like Starbucks buy Teavana for 650m and then close all the stores? Razer buying the flunked Ouya then terminating all of Ouya's ...
user3704920's user avatar
21 votes
2 answers
44k views

I have Sprint shares. What does this merger with T-Mobile mean for my shares?

Over the weekend Sprint and T-Mobile announced again that they would try to merge. Assuming the powers that be in the US don't have any issue with this deal and it moves forward as proposed, what ...
Lizza's user avatar
  • 313
3 votes
1 answer
108 views

What is the cost basis when selling shares received as part of an acquisition?

If I vested 100 options in StartupCo at a strike of $1 and I exercise then I will have paid $100 for those shares of StartupCo. If BigCorp acquires StartupCo and I receive $5 and .25 shares in ...
cclark's user avatar
  • 419