Im confused with this
Can someone please assist me, with all good will intended i do not understand this certain question i have to do for my investor's club so..: A local publicly traded insurance company is planning on taking over another local PRIVATELY held insurance company. what impact can this have on the stock price?
April 9, 2015
1 Comment • Newest first
I have absolutely no knowledge in this and just googled the definitions and made a guess.
Since the public (Company A) is going to be buying the majority shares of the private, the shares of the private (company B) are available to the public to purchase.
Since stock B used to be spread out in bigger portions (fewer people, less spread), being transferred to A has spread the stocks even more. Each person will want to sell the stocks for a higher value than their worth, so I think stock B will increase in price.