If a company is purchased for a certain price, why would the stock trade for lower?

Answers:1   |   LastUpdateAt:2012-08-19 05:40:03  

Question
Aleksander from Guam
Asked at 2012-08-03 16:38:02
I saw a company that has agreed to a deal to be bought for $ 21.50 per share , with the sale completed within two months. The stock traded today for about $ 20.25 per share. So even though the deal has not officially closed , however , would not be worth it to buy stock and hold it until the sale gives you $ 21.50 per share ? The sale appears to be a very safe business , why is the stock still sells for a dollar or so cheaper?
Answer1ChirsAnswered at 2012-08-19 05:40:03
It is not unusual for an action to change a little below the offer price for the buyer , but 5.8 percent is a bit excessive . The difference represents the risk that the deal can not happen. And it seems that the market sees some risk that the deal can not happen. If the deal goes through, you can make a relatively rapid 5.8 percent . Otherwise you could lose a lot more if the deal falls through. The price will drop a bit .
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