Typically a premium is paid on top of the current stock price any time one company acquires another company, which is the scenario you describe. >The target co

Typically a premium is paid on top of the current stock price any time one company acquires another company, which is the scenario you describe. >The target company's stock usually rises because the acquiring company has to pay a premium for the acquisition. The reason for the premium is that the shareholders of the target company, who need to approve the takeover, are unlikely to approve the acquisition unless the stock price is above the prevailing market price. If the takeover bid equates to a lower stock price than the current price of the target company, there's little incentive for the current owners of the target company to sell their shares to the acquiring company. https://www.investopedia.com/ask/answers/203.asp https://www.investopedia.com/ask/answers/203.asp Granted, this isn't a scenario where majority of owners are "dumping" the stock on the open market, but rather a scenario where a buyer is snatching up a large share of the stock. So really it isn't about the amount of stock being transacted, but the reason for the transaction (sell pressure vs buy pressure).