When deal is complete, Broadcom pays the check and the $12.00 earnigs per share will be paid to stockholders.
Next business day, when markets open, I imagine the stock price will drop tremendously, as it has less inherent value (since enterprise assets are gone).
But, besides the market reaction, when the 12 EPS gets paid, is there any formal readjustment of the stock price (i.e. will they open the next day with a $12 reduction?).
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Do I need to wait for the $12 or just sell now/ So If I have vested RSU and ESPP do I need to sell it know before the merge or not?
Of course the value decreases accordingly!
Here's the data from the $4 in March 2016:
https://finance.yahoo.com/quote/SYMC/history?period1=1456963200&period2=1457136000&interval=1d&filter=history&frequency=1d
When they did the $4 EPS after the Veritas sale the stock price went down by $4, it then came back up quite quickly. There is no guarantee that will happen this time.
The stock price is not affected by the EPS, this is an additional payment. They did an EPS of $4 a few years back and the stock was unaffected. This time however, everyone is clinging on to their shares until the EPS is paid. I know for sure I'll take the EPS, sell all my shares, cut my losses and then run.
It goes down $12