I know it doesnt mean much in this space as there doesnt seem to be any repercussion for anything, but when a company gets bought out or goes private it is supposed to be at a fair value. If a company comes out and makes an offer to go private and the offer is legitimate it is basically stating what is in their filings are pretty much correct and in that case even if some are trading at ridiculous levels, a 100% buyout makes sense. Puda is a perfect example and really isnt making an offer that is that unreasonable, I mean less than a month ago it was trading around $12 for months. So for the people that recently got in, yes, it seems ridiculous, but the investors who have been in it for awhile arent making out at all. Again, this is assuming an offer being legitimate. You go through all of these stocks and just because it is a 100% premium today, take a look back not too long ago and it doesnt seem like much of a premium at all. Think if ONP got bought out for $10, that would be a 150% increase and would seem outrageous, but before all of the allegations it was trading between $8-10 and believe it even touched $15 at one point. These stocks, again if legitimate, or the ones that are a 100% premium isnt much considering where they were trading for awhile and still undervalued at that point.
In reality, independent board members could deny a low price, institutions could go after the company, etc. It may not mean something would end up happening, but I definitely get it. Many of the longterm investors in these stocks are actually going to get screwed in these deals if they go through.
AI
