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Re: None

Monday, 10/21/2013 3:02:53 PM

Monday, October 21, 2013 3:02:53 PM

Post# of 16686
I wonder

If I were a larger company that wanted to take over a smaller company with a "breakthrough" technology in a potentially massive sales context, how would I go about obtaining the technology at the most favorable price? I might--if I were ruthless and savvy--try to work over a reasonably short period of time to reduce the price of the company's shares so that I saved my own company a great deal of money. Of course this is absolutely hypothetical.

But assume a smaller breakthrough technology company had 100 million shares outstanding and they were selling at $10.00 per share. If I paid that on behalf of my larger company the cost of acquisition would be $1 billion. But if over time I employed a strategy to drive the company with the breakthrough technology down to $2.50 per share then the acquisition would only cost $250 million and I have saved my larger company $750 million. I have also increased the probability that the smaller company will be happy to have the offer because of the psychology that my strategy created. I think I get a promotion.

Of course this is totally hypothetical and I am simply "thinking out loud" for my own amusement.