Intel offered 60% more than McAfee was worth yesterday. Basically if you buy MFE now (up 57% as I write), you're essentially just buying a bond with a 3% return between now and when the stock switches to Intel. Of course, there's always a chance the deal isn't completed for whatever reason.
As for Intel going down, I would sell too. I don't really see how this deal makes sense.
Very true. My point was that this just seems like a bad idea to me, and it would scare me from holding the stock if management keeps making deals like this.
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Heard via NPR this morning: Intel stocks are down a few %, while McAfee is up over 50%.
Seems investors think this is better for McAfee than Intel, too.
Intel offered 60% more than McAfee was worth yesterday. Basically if you buy MFE now (up 57% as I write), you're essentially just buying a bond with a 3% return between now and when the stock switches to Intel. Of course, there's always a chance the deal isn't completed for whatever reason.
As for Intel going down, I would sell too. I don't really see how this deal makes sense.
The purchaser's stock typically goes down because the company just spent a lot of money... whether loaned or not.
Very true. My point was that this just seems like a bad idea to me, and it would scare me from holding the stock if management keeps making deals like this.
Pretty typical for an acquisition -- the stock price of the company to be acquired will rise quickly to the price per share the buyer offers.