I think it is important to note that the path forward from here involves a transition between two separate and distinct investment theses.
Prior to the actual completion of the r/m, the key questions focus on deal-making and dilution. Can management actually close a deal, and can they (and do they want to) close it on terms favorable to pre-r/m shareholders? Naturally, as these are NEVER entirely SURE things, the stock will trade at a considerable discount prior to the r/m actually being completed and the terms made public. Many investors simply won't touch a pre-r/m stock, as the uncertainties are that great.
After the completion of the merger, the focus shifts to the quality of the business involved, its potential, and management's ability to operate and grow that business.
A management team capable of the deal-making may not be capable of effectively running the operations, and vice versa.
Similarly, some investors may be in only for the pop expected as the uncertainty around the r/m is eliminated, others may only want to be in later for the operational growth, and some may want to hold for both.
Even with the best business, there will be a pre-r/m discount, and even with the best business, there will be some who sell and move on upon completion of the r/m, because they don't want anything longer term and/or they feel they have more leverage with the next quality pre-r/m shell.
While I would not predict prices specifically, it is not unusual for a stock to move up by a factor of 2-10 on completion of an attractive looking r/m. There is naturally then some softness as shares transition to those looking for longer-term involvement in a growth business from those playing only the r/m (usually at prices favorable to the former group).
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