Apologies for my fundamental lack of understanding of how stocks are valued. It's a miracle that I fooled my various employers for so long.
Taking your example, the notional cap of the combined company would rise from $1bn to $2bn. But no value has been created as you have paid out $1bn in consideration. Reported EPS would however rise enormously. More than likely the PER would rises too as investors anticipate more earnings enhancing deals, so the share price gets a double boost. And the execs get a triple boost, as their SARs are linked to EPS growth! This is the magic sauce I was referring to.
Why I passed on CTD., page-78
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Last
$12.78 |
Change
0.230(1.83%) |
Mkt cap ! $1.870B | |||
| Open | High | Low | Value | Volume |
| $12.55 | $12.88 | $12.54 | $2.782M | 218.3K |
Buyers (Bids)
| No. | Vol. | Price($) |
|---|---|---|
| 1 | 500 | $12.77 |
Sellers (Offers)
| Price($) | Vol. | No. |
|---|---|---|
| $12.83 | 511 | 1 |
View Market Depth
| Last trade - 16.10pm 07/10/2024 (20 minute delay) ? |
| CTD (ASX) Chart |