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But they buy it back at market value, so they just become another stock market investor.
Not really- and especially not in the case of a hostile takeover. At that point the buyer really does consider whether the cost incurred to purchase the stock is worth payed in order to gain controlling shares of a company.

I know this much- my brother in law's company got bought out by a larger company (not a hostile takeover) and everyone who had stock got paid off when it happened. Some of the employees who'd been there for years had quite a bit of stock and got handed checks for 200K-300K. I'm sure the purchasing company would not have paid that amount to the shareholders if it was just a matter of perceived value. He said it was crazy that these NOC employees all came to work the next week with new cars- including one who purchased a Lotus.
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-Jeff
Rome did not create a great empire by having meetings; they did it by killing all those who opposed them.