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Generally if you want to buy the whole thing / take it private, you have to pay out all shareholders in cash the public market price plus a premium - you defini

Generally if you want to buy the whole thing / take it private, you have to pay out all shareholders in cash the public market price plus a premium - you definitely don't get a discount. Just look at what happened to Elon.

blibble 3y ago
you don't know what the public market price is for the majority of the shares as only 10% were sold today
- arcticbull 3y ago
  I don't know what that means - but when an individual or a company looks to buy out another company wholesale, they do in fact use the public market price, multiply it out by the full share cap, and then add a premium on top. That's literally how a buyout works.
  - blibble 3y ago
    > I don't know what that means maybe we should stop here then
    - arcticbull 3y ago
      Your sentence didn't make sense - just look up how buyouts work and how they're priced.
  - RussianCow 3y ago
    That's literally not how buyouts work. The public stock price is certainly one factor of many that go into calculating the acquisition price, but it is not an absolute floor. One counter-example that comes to mind is Yahoo!, which was purchased by Verizon for less than its market cap at the time.
    - arcticbull 3y ago
      It’s not an absolute floor no, but it’s a strong factor in price determination. It feeds back the other way too, if a competitor is acquired for far less than public price it smacks the public price of competitors.
alex_young 3y ago
Assuming there is a buyer waiting to take ARM private seems pretty unlikely. If you happen to hold the majority of shares and then try to sell them suddenly you’ll sell them at a discount. Just look at TSLA when Elon had to liquidate significantly to pay for TWTR.
- TechBro8615 3y ago
  > Assuming there is a buyer waiting to take ARM private seems pretty unlikely. The whole premise of this comment thread is that ARM made more by selling 10% of its stock on a public market than they would have by selling 100% of it to Nvidia. In other words: there already was a buyer who wanted to take ARM private. So how does it seem unreasonable to assume one would exist, when we already know that one did?
  - alex_young 3y ago
    Ok. Let’s play that out. Nvidia walks away from a negotiation at 40 and now they are waiting around to do a leveraged buyout at 70? Why?
    - TechBro8615 3y ago
      They didn't walk away from it. They were blocked from making the acquisition.

blibble 3y ago

you don't know what the public market price is for the majority of the shares as only 10% were sold today

arcticbull 3y ago
I don't know what that means - but when an individual or a company looks to buy out another company wholesale, they do in fact use the public market price, multiply it out by the full share cap, and then add a premium on top. That's literally how a buyout works.
- blibble 3y ago
  > I don't know what that means maybe we should stop here then
  - arcticbull 3y ago
    Your sentence didn't make sense - just look up how buyouts work and how they're priced.
- RussianCow 3y ago
  That's literally not how buyouts work. The public stock price is certainly one factor of many that go into calculating the acquisition price, but it is not an absolute floor. One counter-example that comes to mind is Yahoo!, which was purchased by Verizon for less than its market cap at the time.
  - arcticbull 3y ago
    It’s not an absolute floor no, but it’s a strong factor in price determination. It feeds back the other way too, if a competitor is acquired for far less than public price it smacks the public price of competitors.

alex_young 3y ago

Assuming there is a buyer waiting to take ARM private seems pretty unlikely. If you happen to hold the majority of shares and then try to sell them suddenly you’ll sell them at a discount. Just look at TSLA when Elon had to liquidate significantly to pay for TWTR.

TechBro8615 3y ago
> Assuming there is a buyer waiting to take ARM private seems pretty unlikely. The whole premise of this comment thread is that ARM made more by selling 10% of its stock on a public market than they would have by selling 100% of it to Nvidia. In other words: there already was a buyer who wanted to take ARM private. So how does it seem unreasonable to assume one would exist, when we already know that one did?
- alex_young 3y ago
  Ok. Let’s play that out. Nvidia walks away from a negotiation at 40 and now they are waiting around to do a leveraged buyout at 70? Why?
  - TechBro8615 3y ago
    They didn't walk away from it. They were blocked from making the acquisition.