When one company acquires another, the stock prices of both entities tend to move typically in the opposite direction, at least over the short-term. In most cases, the target company's stock rises because the acquiring company pays a premium for the acquisition, in order to provide an incent...
A stock acquisition is not subject to the Bulk Sales Act. In a stock sale, the buyer assumes the current depreciation schedule of assets and the existing tax status of the corporation. Loans to the owner and personal liabilities are normally removed. One reason for a stock sale is when ther...
Companies on the positive side (57%) remained positive a year afterwards, with an average return of 32.7%—an enormous difference of nearly 60 percentage points. Put simply, a negative start is difficult to reverse—even more so if it’s an all-stock transaction. Among those deals, t...
The main advantage of this swap is that the employee does not have to use cash to receive the new set of shares. The drawback is that the swap may triggertaxliabilities. An employee in this situation should seek out a qualified individual to help them validate the costs and benefits of t...
There’s an obvious answer to this – that you need new customers to keep growing – but let’s rephrase the question slightly. If customer acquisition is a given, let’s instead ask: why does it need to be thought about so carefully?
If we do public, how long will the stock be locked up? What does the initial public offering (IPO) look like for shareholders? Look for acquisition models that not only deliver on the financial returns you deserve, but also use strategic resources and wide market reach...
Subscriptions can work well for many products and services, but they’re not a one-size-fits-all solution. Before jumping into a subscription model, it’s important to think about whether it actually fits your business and your customers. 1. Does your product fit? Evaluate whether your produc...
Document all the research and planning you’ve done up to this point with a formal eCommerce business plan. Not only does a business plan capture your work in a comprehensive and detailed format, but it also provides a touchstone for keeping your day-to-day operations focused on your mission...
direct and indirect. Direct describes long-term significant investments such as the acquisition of plants and buildings. At the same time, indirect usually refers to investors buying shares in foreign companies that trade on a foreign stock exchange. Another form of foreign investment is through loan...
What Does a High Enterprise Value Mean? Enterprise value (EV) is a valuation concept that reflects an estimate of what it would cost to purchase a company. Suppose you compare the enterprise values of two companies in the same industry. If Company A has a much higher EV than Company B, ...