CompuServe Messages

> Why does the stock price necessarily go up if there's rumors of a > takeover? I'll take a shot at answering this one. A purchasing company must offer a premium, and usually a substantial premium, over the current market price because the purchasing company is buying so many shares. At the current price of about $17., only so many are willing to part with their stock. So a purchasing company usually approaches the company to be acquired with an offer that hopefully will make all shareholders happy (they all make money). Rumors of a takeover will attract investors looking for a fast buck. Wouldn't you buy a stock at $17. if you knew for certain you would get $32. 6 months later? What bank pays that interest? (Okay, besides BCCI 🙂 Since more players come in on takeover rumors, the stock price goes up… I hope that was a semi-intelligent response. – via Whap!