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Is it less risky? Say a decent chunk of your portfolio in a single stock? And something weird happens during due diligence , not only is the acquisition over -
by brianwawok 7y ago
Is it less risky? Say a decent chunk of your portfolio in a single stock? And something weird happens during due diligence , not only is the acquisition over - the stock will bomb.
Not sure how often acquisitions fall through after being announced, I assume very low. But still seems similar or higher risk then a stock fund.
- lonelappde 7y agoRedhat has a 20year history as a public company, it's very unlikely that there'd be a big surprise in due diligence.
- bklyn11201 7y agoI think the worry was less due diligence and more a weird anti-trust case from USA, China, or Europe.
- RickJWagner 7y agoI saw (felt) this happen. Worked for Acxiom when they were to be bought by Silverlake. The stock shot up to near-sale-price levels, where I should have sold (but did not). The deal came unraveled, Acxiom stock dropped like a rock and the company had a reputation as 'damaged goods' for many years. Lesson: There is a small upside, but a massive downside that can materialize.
- brianwawok 7y agoDoesn’t happen a ton but yah it sounds rough if it does. Maybe similar risk profile to local government bonds. Common case you can a few %. If your town goes flint you take a big haircut.