(Cash Pay) Cash or stock? A profit by any name is sweet - USA Today
USA TODAY financial markets reporter Matt Krantz answers a new question every weekday at money. When the acquiring company is flush with cash or if the acquisition is small, it may decide to pay cash. If the price is large, the company’s stock price is richly valued or the company can’t afford to part with cash, the acquiring company may choose to pay using stock. Large institutional investors who have owned a stock for a long time, and who believe the merger will work out, like stock buyouts, says Morton Pierce, chairman of mergers and acquisitions at law firm Dewey Ballantine. Investors, though, are so happy a company they own has been bought at a premium they are indifferent to the form of payment, says Hugh Johnson of Johnson Illington Partners. Matt Krantz is a financial markets reporter at USA TODAY and author of Investing Online for Dummies. Find Out More
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