EA - Proposes Take Two Acquisition Bid

Yes, it is business.

It is so much a business that the CEO of Take 2 has said openly I believe that they won't sell at 26 $/share since they believe the bid to be too low e.g. not what the company, Take 2, currently is worth.

Surprisingly enough, everytime rumour of a merger exist, stock and share values skyrocket. I don't seem to understand why this ?

Anyway, I've read on the codex that EA's bid on 26 $ a share multiplied with 31 million shares = 806 Million US dollars. And I just think to myself: Where have EA kept all this money? I mean they have just bought Bioware/Pandemic for about the same amount and about 500 US dollars? or so were payment in cash. Do EA have sceret money stash somewhere? And if so where it is ? And do we need to outfit a party of advanced D&D players to combat the EVIL uberboss that is EA? or something like that...
 
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Surprisingly enough, everytime rumour of a merger exist, stock and share values skyrocket. I don't seem to understand why this ?

It's fairly simple. Stocks are generally purchased with a mind to make a profit, yes? In the case of any merger or acquisition, stock holders will either get stock in the new company (which is worth more than their old stock) or they will get bought out, for more than their stock is worth.

This means that once the merger/acquisition took place, the stock value has risen, and anyone who bought stock prior to the merger has made a profit. That means everyone wants to buy this stock. When everyone wants to buy stock, the normal "scarcity" dynamic takes place, supply and demand, and as with any good, the price goes up.

Anyway, I've read on the codex that EA's bid on 26 $ a share multiplied with 31 million shares = 806 Million US dollars.

Incorrect. The bid is 2 billion USD.

And I just think to myself: Where have EA kept all this money?

Purchases rarely happen in cash options all at once, though I believe this is a so-called all-cash offer.

Regardless, companies like EA tend to have enough liquid means to just buy out like that. Same is happening with Microsoft and Yahoo, and Microsoft bid 44.6 billion USD.
 
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