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=== At the time of Acquisition<ref>https://www.hcinnovationgroup.com/analytics-ai/artifical-intelligence-machine-learning/article/21218486/stock-market-analysts-observers-react-to-microsofts-acquisition-of-nuance</ref> === | === At the time of Acquisition<ref>https://www.hcinnovationgroup.com/analytics-ai/artifical-intelligence-machine-learning/article/21218486/stock-market-analysts-observers-react-to-microsofts-acquisition-of-nuance</ref> === | ||
The day after Microsoft announced its plans to acquire Nuance, Microsoft stock had risen 6 cents to $255.91, while “Nuance stock blasted 16 percent higher to $52.85,” Seitz reported. | The day after Microsoft announced its plans to acquire Nuance, Microsoft stock had risen 6 cents to $255.91, while “Nuance stock blasted 16 percent higher to $52.85,” Seitz reported. When a company purchases another, it is common for the stock price of the acquiring company to experience a temporary decline, while the stock price of the target company tends to surge. The decline in the acquiring company's share price is often due to paying a higher price than usual for the target company or taking on debt to fund the acquisition. On the other hand, the short-term increase in the target company's share price is a result of shareholders agreeing to the deal only if the purchase price exceeds their company's current valuation. However, in the long term, acquisitions generally have a positive impact on the acquiring company's share price. | ||
When a company purchases another, it is common for the stock price of the acquiring company to experience a temporary decline, while the stock price of the target company tends to surge. The decline in the acquiring company's share price is often due to paying a higher price than usual for the target company or taking on debt to fund the acquisition. | |||
However, in the long term, acquisitions generally have a positive impact on the acquiring company's share price. | |||
== References == | == References == |