Acquired Effects
If a company is about to acquire another company that is established and would double their revenue, what generally happens to stock prices before and after the acquisition?
Depending on how much the acquiring company is paying, their stock usually drops ahead of the acquisition.
They now only have a non-binding LOI so I guess I have to watch the press releases and buy before they make the deal final.
The details of the deal will dictate what happens.
If I was buying a black box from you for $5, and this magic box printed five $100 bills everyday, then my stock would rallying big time!
The company getting bought almost always goes up though, as a general rule. Of course there can be exceptions, but it's a fairly safe bet.