Despite what some have said, the share price seems to decline when the deal looks like it’s not happening and it rises when approvals come through. Last week it was generally trending down and now the share price is rising. There was one article I read that said people may be buying on the bet that the deal will eventually close, but it seems to have been a good indicator over the last year on news.
I can’t see AVGO letting this deal go. It seems totally different to Qualcomm.
The share price is a good indicator of what others think will happen (and I stress "think"). This is a very simplified explanation of the VMW share price means.
Once you buy VMW stock you have to make an election on whether you want cash (1 VMW -> $142.50) or AVGO stock (1 VMW -> 0.252 AVGO). However, since the deadline to make an election has passed you are going to get the cash option since 96% of the current share holders have already elected for AVGO stock. But the deal hasn't closed yet and BC might extend the deadline to close the deal to give them more time, in which case they will also extend the election deadline.
So, a share price of $142.50 indicates that traders think the deal will close soon without extending the election deadline.
A share price > $142.50 indicates that traders think the deal will be delayed and the election deadline will be extended. At the current AVGO price of $841, 1 share of VMW is worth ($142.50 + $841 *0.252) / 2 = $177
A share price < $142.50 indicates that traders think the deal will not close and VMware will probably drop to its pre-deal levels of $120, and possibly much lower.
Timing is everything with share sales. Well said.
If you're still holding VMW stock, you've missed the window of opportunity now. But this is the stock market, you lose here but can make it up on some other investment.
"I can’t see AVGO letting this deal go. It seems totally different to Qualcomm.'
It has strong resistance from a national leader. It's very similar. It's also very serious.
Wall Street analysts are sharing deep concerns about the odds of success. This is a big risk. While it's not insurmountable, success is a long shot and very high risk at this time.
There a bunch of fn short sellers all over this - it won’t crash until they announce the deal is dead end of nov
OP again, I’m the last person to be giving advice. It’s an observation that would be good for someone with market knowledge to comment on.
Op so you recommend we buy VMW stock ?