What happens to the stock of the company who is bought by another publicly traded company.
Here is an example. If a company buys Twitter what happens to the stocks of the people who are holding twitter stock?
I assume if the buying company leaves twitter alone nothing, but if they absorb it and make it a part of their existing company, then what?
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This depends on how the acquisition and merger is done. In order to merge two companies together you need permission from the shareholders. Depending on the company charter you need either 1/2 or 2/3 of shares to agree to this deal, the rest is forced into it. However the rest can not be discriminated against and needs to get the exact same deal as those who agree. All shareholders are treated equal. In some cases the shareholders get paid in cash. This is not so much different from normal dividend or buyback but it is large enough that the shares are worthless afterwards. In other cases however there is not enough cash to pay all the shareholders and the company end up buying the other company using their own shares. If this happens then the people who own a stock in a company might find themselves owning stock in the merged company instead. In none of these circumstances will you end up with a single shareholder being able to hold out and prevent the deal from going through or some shareholders not getting fair compensation for their shares.
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