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thanks! my rudimentary understanding was pretty much correct... it sounds, then, like shareholders simply don't have faith in the acquisition?
by catshirt 10y ago
thanks! my rudimentary understanding was pretty much correct... it sounds, then, like shareholders simply don't have faith in the acquisition?
- charlesdm 10y agoIt depends. If AT&T spends a lot of cash today, the intrinsic value of a single share goes down, because there is less cash to return to that shareholder tomorrow. However, if it looks like the integration is going well, the price will increase, since indeed the company will be more valuable. In the event of a deal, Time Warner shareholders are getting a cash premium SOON. So the price goes up.