Why will stock prices ALWAYS INCREASE when this happens? @PavanSathiraju
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In this video, we go over how mergers and acquisitions (M&A) impact the stock prices of companies. The topic of mergers and acquisitions has been trending in the last couple of years. We bring to you a complete overview of what M&A is, why companies decide to do it, how it helps the company to grow faster and what are the effects on the stock price. You will also learn about the different types of mergers and acquisitions, namely, horizontal and vertical mergers.
Mergers and acquisitions are a common occurrence in today's corporate world. It is usually a sign that a company is growing and generating more revenue, which ultimately translates into more earnings for stockholders. M & A is also a common exit strategy for many companies. But what is the difference between a merger and an acquisition and how to know how it is going to impact the share prices of concerned companies? Let's find out.
I have discussed the difference between Mergers and Acquisitions in the beginning and also given some background for the types of mergers and acquisitions. We can classify it on the basis of the size of the companies and business synergies. M&A deals are often done to create synergies in the combined company and to fill a gap in the market, such as a product, service or geographic area.
While mergers and acquisitions are not uncommon, they can create a negative as well as a positive impact on the affected companies. That's why it is important to know how mergers affect companies' stock prices. I’ve discussed what happens to the acquired companies post a merger or acquisition. With examples, I’ve explained a Merger and Acquisition case study telling you how Mergers and Acquisitions can have a positive or negative impact on a company’s share prices.
After that, I discussed what happens to the acquiring company. How the acquiring company’s share price is affected because of the acquisition? It is important to know if you are an investing or finance or business student. This video is a mergers and acquisition basics for beginners who want to understand how M&As impact the stock prices of the concerned Companies. You’ll get to know what happens to stock after the merger. In the end, I’ve enumerated 3 learnings we can take from this video. Hope you find the video valuable and please share your answers and opinions in the comments.
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Chapters
0:00 - Intro
0:25 - Definition of Merger and Acquisition
1:47 - What happens to Acquired Companies?
4:48 - What happens to Acquirer Companies?
8:06 - 3 Learnings from M&A and Stock Price Volatility
10:37 - Outro