Mergers

[aggieCub]

This morning woke up to the news of a stock I own (ORB) being merged with a rather larger company. By the looks of it ORB is getting the better end of the deal as the smaller company is still controlling 40%-odd of the new company. I would love to say that this was a well picked stock with lots of research but unfortunately it was an impulsive buys, I mean they make rockets how cool is that

[AidanOr]

So my question is how would I value this new company? It will take until the end of the year and the current 20% jump in the stock will settle down. What are my next steps. I am only now starting to get a bit of an understanding in the company so now throwing in the new company (they will be making the engines for the rockets) might take even more time.

[ajzohrnd77]

Nice one. Always a good feeling to wake up to a merger news.

When you've got a merger, no point in trying to understand the business right now.
Put that off until next year or something.

[Akimtiuvd]

More important to understand the merger details because you have to decide whether the deal undervalues the company or not.


Does ORB have activists? Did it accept? What's the intrinsic value?


Example is Dell.


Everybody KNEW Michael Dell was lowballing. It also had activists fighting to raise the bid.