Value of shares increase after buyout announcement ?

there is no difference in the change of the stock price based on the entity doing the acquiring. regardless if the buyer is a publicly traded company or a private equity group the offer price will dictate the movement in the stock.

the benefactor in a buyout offer is the holder of the stock the day the offer is announced. this is simply because the share holder realizes the sudden move higher (the 10$ move in the stock you are discussing). the offer price isn't limited to the shareholder of record, it will be the price any shareholder receives regardless of when the stock was purchased. typically the stock will stay around the 21$ level unless the market thinks that a second contender will step in and offer a price higher than the 21$ offered by the original bidder. the stock could also move higher than the 21$ if the market feels the current offer isn't enough and will not be approved by the current shareholders (they have to approve the offer unless it is a hostile takeover). in a hostile take over the entity making the offer could own enough shares (or have enough influence) to force the sell but i digress. if the market feels the offer will not be approved and that the entity making the offer will make a higher offer that would move the stock price higher. if no event is likely to happen which would impact the offer price any change above or below the 21$ is generally just traders causing mild fluctuations in the price. doesn't seem to make sense huh? the market's philosophy is any thing can happen...

being a retired broker i know it is a good day when you own shares of a company and it moves from 11 to 21 in a matter of minutes...unless you think your stock is worth more than 21 or you bought it for more than 21$.

i hope you owned you 21$ a share stock, if not i hope you are in the next big move.

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Value of shares increase after buyout announcement ?

Why do investors run up the value of an individual stock, after a buyout announcement has been made?

I recently watched a stock go up from approx $11. a share, to approx $21 a share. This was just based on an announcement that a deal was made. In doing some homework, I notice that the...

The buyout price is not for those on record during day of the announcement but the day the takeover is completed and normally only if approved by the shareholders of both companies. It only makes sense that it is the day of the takeover since stocks held at that time are traded for new stocks or cash. If the investor didn't own the stock on the day of the exchange, what would the investor be trading and what would the owner who purchased the stock get since those shares would be delisted after the day of the takeover?

Therefore the stock is traded in anticipation that the takeover will be completed.

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Because the takeover company will generally offer a premium over the current stock price to entice current shareholders to tender their shares. Also, there is usually some speculation that the first premium offered will be insufficient and the takeover company will have to sweeten the bid by upping the price.

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