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That's why companies pay for acquisitions or mergers primarily in stock. It keeps cash reserves available for other uses. If the acquisition flops, you can writ
by rchaud 3y ago
That's why companies pay for acquisitions or mergers primarily in stock. It keeps cash reserves available for other uses. If the acquisition flops, you can write down the value, take a hit on the income statement, and lower your tax owed for the year.
- lotsofpulp 3y agoThat is why sellers do not always agree to accept stock instead of cash.
- rchaud 3y agoWhen in the "billions" range, the deals are going to be light on cash. That's how Adobe can "pay" $20bn for Figma using stock.
- lotsofpulp 3y agoI believe twitter was an all cash transaction. https://www.sec.gov/Archives/edgar/data/876661/000087666122000890/0000876661-22-000890.txt https://www.sec.gov/Archives/edgar/data/876661/0000876661220... > The merger between Twitter, Inc. and X Holdings II, Inc., a wholly owned subsidiary of X Holdings I, Inc., wholly owned by Elon R. Musk became effective on October 27, 2022. Each share of Twitter, Inc. Common Stock was exchanged for USD 54.20 in cash, without interest and less any applicable withholding taxes.