Modify on 2023-05-02 20:04
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What Happens To My Stock When The Company Gets Acquired?
The merger and acquisition (M&A) market has really heated up on Wall Street in recent years. If you’ve never owned stock in a company that has been acquired, you may not be familiar with the process.
First of all, a buyout is typically very good news for shareholders of the company being acquired. Suitors tend to pay a significant premium to the target's current market price to ensure shareholders will vote to approve the deal.
For example, LinkedIn Corp (NYSE: LNKD) shares spiked nearly 50 percent when Microsoft Corporation (NASDAQ: MSFT) announced a takeover earlier this year. For traders looking for a quick buck, the time right after the buyout announcement is usually a good opportunity to cash out. However, long-term investors may wonder what happens to a stock that is bought out if they don’t actually sell the shares.