Disclosure: First time involved in BO situation. What if an offer is made at $25? I assume the stock will climb close to $25. But what if Joe Z rejects? How much will it drop if at all or will $25 be the base assuming that higher offers will come in. Thx!
If offer is 25$--then stock will trade higher for that day and couple of days.
If 25$ offer is rejected,then Stock will go up to 25$,but how long does it stay above 25$ depends upon bidding co.
For Amlyin--The price kep fluctuating-up/down-until Ichan stepped in.--then it was up and up.
For HGSI--the price went up--but never went too far.Premium offered was close to 10% after the original bid.GSK owned part of HGSI already--but HGSI argument was it was very high a few months ago.But GSK did not accept that thesis.
I think this buyout is similar to Amylin--except Amylin had its own sales force in USA and its sales were over 500 mil.$. It was paid 7 billion$--pretty high premium to Sales.
Usually the news come out like "Amrn taken over for $25/share".... game over, that's it.
Or like "Amrn rejects $25/sh offer".
That's the same: price goes instantly to $25 (see Hgsi for example).
For no reason pps goes under $25... for some weeks.
After that, usually there's speculation... both up and down (bear trap), because most investors are waiting for a better offer.
However today's pure speculation.
Don't be fooled by those crooks..... buyout usually happens when nobody thinks/hopes it.
Don't stay on the sideline... too risky staying on draft.
But also, don't hold still 100%...... play the same games these crooks marketmakers&hfunds do play!!!!
No matter what happens or what's the talk.
Hold some still.
But also Trade some!!!
I made 2000$ 1 week ago and 1000$+ today!
I watched AMLN as well as HGSI closely. There were rumors about price every week.They turned out to be true for Amylin. For HGSI,I made only 10% in 3 months--while I made 35% for AMLN in 3 months.
I stayed in with Amlyn-kept accumulating.