When a pub. traded company buys another pub. traded company, when/how does the bought company stock disappear?

The answer is "it depends."

If everyone tenders their shares, then the other stock will disappear with the tender. Usually, the stock stops trading at shareholder approval unless further regulatory approval is needed. The stock can continue to exist if some people refuse to tender their shares. In that case, they become minority shareholders totally at the will of the buying company and have no say in their investment any longer. However, if they dislike the deal and do not want to get out, they can retain their minority interest on a non-tradable basis forever.

Its a little unclear whether the company being purchased is being purchased for stock or for cash.

If the target company is being purchased for cash, its stock stops trading as of the merger date. Provided a transaction doesn't have minority rights (they usually don't), all shareholders that have tendered their shares will receive the purchase price. At that point the target company ceases to exist. If not all shares were redeemed, the ones outstanding can still be redeemed with the purchaser for the offer price. They have no other value.

If owners of the target company are being offered shares, then the shares of the target company are retired and shares of the acquiring company are issued in its place. Usually before the final transaction takes place the market has adjusted the stock price of the offering company to take into account the additional cash flow from the acquisition... and the dilutive effect of issuing additional shares. Therefore, there's little (if any) adjustment at the actual close of the deal in a stock swap.

It usually takes several months.

The old company is no longer traded anywhere.

Your broker changes your holdings.

For example if you are holding stocks in Reebok and the symbol is REE and Adidas with the symbol ADI buys the company.

Your brokerage account would change the symbols from REE to ADI.

This asumes you are getting one share of Adidas for one share of Reebok.

If you are getting 1 share of Adidas for each share of Reebok then if you have 100 REE you would only have 50 ADI.

Sometimes you also get some cash.

There is no trading turmoil. All your broker does is a small modification to your account.

AT&T has the symbol T and it will eventually will disappear because AT&T was bought by Southwestern Bell and the symbol is BLS.

You can check the prices of both stock everyday if you want until one of them goes away.

Have owned stock several times when this has happened. In each case the value of the stock of the "old" company didn't change but rather the number of shares I owned in the new company changed. If pub. traded, this should be easy info to find. Mine were all on the Nasdaq and the share ratio was always in the stock news.

If your company is the surviving company of the acquisition in the end, its share price will be adjusted automatically as a result of the venture and you'll be notified if you are a current owner.

Try to get a prospectus on the deal.