GO
Loading...

Stock Price Behavior After an Acquisition: CNBC Explains

When a company is bought, its stock price is directly affected and may shoot up or down significantly. When one company is purchased using shares of another, the acquired company’s stock price generally tracks at a ratio to the price of the acquiring company’s stock. How and why does this work? Salman Khan of the Khan Academy explains in a hypothetical example.

From this video, you’ll understand:

  • How to identify the transaction price of an acquisition
  • Important assumptions for corporate acquisitions

Contact CNBC Explains

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    Please choose a subscription
    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Latest Special Reports

  • In this ever increasing volatile world only leaders who can manage fast change can survive and prosper.

  • Famous founders reveal their secrets on how to build an iconic company—and change the world in the process.

  • Inside the market's biggest sectors with a look at the trends, companies and trades netting profits for investors.

Central Banking Explained

Corporate Accounting Explained