Generally, buyouts are paid for with stock from the purchasing company. Not always, but most of the time, it seems. Assuming one does hold stock in a company, and that company gets bought for cash, do I get my percentage of that cash?

Liquidations are just selling off assets when the company would otherwise have closed doors, right? I'd be surprised to find that those assets were worth more than the stock was purchased for. If they were, they probably wouldn't be closing doors. Of course, there's the possibility that I bought the stock when it was a small company, it got big, and then foundered under its own weight. I might get more out of it than I paid for it in that case. (Of course, that assumes that the assets were sold for cash and not just more stock.) At the same time, that seems to run contrary to the notion that a company's stock is worth more when it's doing well.

At the same time, at least we're now getting down to answering my initial question. And these are all getting to be reasonable answers: dividends, cash buyouts, and cash liquidations.

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Saying the stock is worthless in between those times is just being short sighted.

I'm not saying that. Between those times, the stock has potential worth. My whole question all along has been "what is the basis of that potential worth".


Edited by wfaulk (23/03/2006 18:40)
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Bitt Faulk