whats happens to palms stock price if htc or rimm buys them?

or dell or anyone else that may buy them out?

Answer by zman492
Stockholders own the company. In order for another company (or individual) to buy Palm they have to convince the majority of the current stockholders to sell their shares. Since almost everyone who owns the stock has a reason for owning it, an acquiring company has to offer to pay enough more than the current price for the shares to convince existing stockholders to sell. This will drive the price up. Palm shares have already gone up on the rumor of a buyout.

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I am an amateur investor and noticed that every time a merger rumor surfaces the stock price of the company rumored to be bought out goes up. Currently there are rumors of Palm being bought out and accordingly its stock price rose. What happens to shareholders of PALM if they are bought out by HTC? How do the investors that rushed to buy PALM stock before the merger benefit from the merger? Any accurate information on the topic would be greatly appreciated.

Answer by jeff410
When a buyout offer is made for a company, such as Palm, the buyer usually offers a premium over the current market price. This is in order to get shareholders to sell. The offer may also be raised and other potential buyers may make competing offers and drive the price up further. This expected future price draws investors and speculators and drives up the price in anticipation.

Answer by dusty_titus
Shareholders of Palm will enjoy the benefits of the “proposed merger” until it happens or until the rumor dissipates, at which time the stock price will go under the previous days quote. Or if the Merger goes ahead, then the stock will rise. It will be many months before a formal arrangement is made between the companies as to how to proceed when one is buying the other. Any investors who rushed to purchase PALM stock in advance of the Merger, may or may not profit from such a movement. The only reason that investors would rush in to purchase stocks in a company that was mentioned for a acquisition or merger, is that other company had decided that they could make a profit from the purchase, in that they could run the company better, or their profits would rise by owning the company.

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