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Non-Tech : AMTK-Profits up
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To: ENOTS who wrote (208)7/14/1998 5:21:00 PM
From: Profi  Read Replies (1) of 224
 
I have been scratching my head to why one would sell a $6 stock for $5, and could not come up with something other than the following. This may sound unrealistic, but here it is.

We know that the sale is not based on the stock price of the other company, that it is just a straight $6 transaction. However, the day that the transaction is made you will own the stock of the other company, and if you don't like the other company (or you bought the stock at 5 to make a quick profit) you will sell your shares. Especially if you are trying to benefit from this gap now and, if a lot of people buy it for 5 hoping to sell it as soon as it becomes 6. That will mean that the share price of the buying company will make a minor dive because of all the sellers, and you will end up not getting that 6, but will settle down for less. Perhaps it is better that those people who would have the intention of selling their shares after the transaction sell now....Then again, those who are buying now are more likely to sell immediately to take their 20%.
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