Vystar Corp (VYST)

[nbhitter22]

Merger/Consolidation Rules 101 - These questions have been greatly skipped over.


1.The shareholders of both companies may experience a dilution of voting power due to the increased number of shares released during the merger process. This phenomenon is prominent in stock-for-stock mergers/consolidations, when the new company offers its shares in exchange for the shares of the target company albeit at an agreed conversion rate. Shareholders of the acquiring company experience a marginal loss of voting power, while shareholders of a smaller target company may see a significant erosion of their voting powers in the relatively larger pool of stakeholders.

2.The stock price of the newly merged company is expected to be higher than that of both the acquiring and target firms, and it is usually profitable for the target firm's shareholders, who benefit from the resulting stock price arbitrage. In the absence of unfavorable economic conditions, shareholders of the merged company usually experience greatly improved long-term performance and dividends.