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Re: OhShit/blkrzzz"Now the new stock needs to move up 4 or 5 times in share price" It's not the $ change in share price that counts ... it's the %age change. In a merger/take-over like this, the owner of the target company stock has everything change ... the number of shares, and the cost basis are both changed by a fixed percentage. i.e. If I own 2 shares of a company with a cost basis of $1 each, and I get 1 share of the new stock - my cost basis on the 'new' stock is $2 a share. Where a 10% move on the old stock would be $0.05 each or $0.10 total A 10% move on the new stock would be $0.20 Put another way - I'd need a 20% increase in the old stock in order to equal a 10% increase in the new stock. |
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