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Pastimes : Can SI Members Really Manipulate Stocks? -- Ignore unavailable to you. Want to Upgrade?

To: Probity98 who wrote (139)	7/31/1998 11:47:00 PM
From: EL KABONG!!!	Read Replies (1) \| Respond to of 461

Probity98, Let's just say it was initially agreed to in principle. Because the stock price increases, wouldn't that mean that the acquisition price has increased also? This would mean that the purchaser has paid more than the original "agreement". Take a course in basic contract law at your local community college. Either an agreement was signed or it wasn't signed. If it was signed, then the company issuing the stock cannot renegotiate the deal. If an agreement wasn't signed, then they were still in negotiations. No deal, and the company issuing the stock can reopen negotiations. Verbal agreements mean squat at these dollar amounts. It's the signed contract that counts. As an example, take a look at the BT and MCI deal that went south after they had reached an agreement in principle. KJC

To: Probity98 who wrote (139)	8/1/1998 12:03:00 AM
From: Jeffrey S. Mitchell	Respond to of 461

OK, let me try to see if I understand what you are trying to say. Company A agrees in principle to buy Company Z for $2M, which they divide as $1M in cash and $1M in stock, or, say, 200,000 shares at the current price of $5. Then, the stock price goes up to $6, making the value in stock $1.2M. So according to your scenario, Company A feels they are now overpaying by $200K and decides to intentionally do things to get the share price down to $5 again so as not to overpay. Right? Ummm.... First of all, Company A is not buying the stock at market so they aren't losing a penny if the price goes down, right? Moreover, if the price goes down they lose buying power as their shares are worth less. So, I see absolutely no incentive in this instance to manipulate the share price down. Conversely, if they agreed to a set dollar amount in stock, they'd most likely want to manipulate the price UP! Am I missing something here? - Jeff