>Correct. But sometimes you don't get that option as a small company being acquired - so getting public liquid stock in good companies is perfectly fine (so long as the lock-up isn't too tight - and it's a part cash deal).
It still tells me that something is amiss. Why not use working capital? What's wrong there? Not enough cash or cash equivalents on hand to do it? Or the company isn't worth committing to by parting with cash?
Either way if I am a stockholder in the purchasing entity, it's a bad deal for me.
Comments
>Correct. But sometimes you don't get that option as a small company being acquired - so getting public liquid stock in good companies is perfectly fine (so long as the lock-up isn't too tight - and it's a part cash deal).
It still tells me that something is amiss. Why not use working capital? What's wrong there? Not enough cash or cash equivalents on hand to do it? Or the company isn't worth committing to by parting with cash?
Either way if I am a stockholder in the purchasing entity, it's a bad deal for me.
Not if the acquired company is more valuable than the stock used to pay for it.