So, as a holder of NXPI and someone new to investing, any advice for this situation? Qualcomm is going to pay $110 in cash for each NXPI share outstanding once the deal closes. But this doesn’t mean the share price is going to magically go up to $110 today or anytime soon, it’s not even close to that in pre-market trading.
What typically happens? I’m assuming if I do nothing at some point down the line my shares will be converted to Qualcomm. But should I expect the share price to creep up towards $110?
I suppose it depends on what old Mr. Market thinks about it, eh? What have you guys experienced?
What typically happens? I’m assuming if I do nothing at some point down the line my shares will be converted to Qualcomm. But should I expect the share price to creep up towards $110?
If “Qualcomm will pay $110 a share in cash for each NXP share outstanding” you get cash, not Qualcomm shares.
If the market thinks the deal goes through the prices rises to the bid price ($110). If the market thinks otherwise the price stays below $110.
Denny is correct. I understand you don’t want to leave money on the table, but sometimes these things can take months and months, and that is IF they go through. Whenever something like this is announced, I would sell almost immediately. You get 95% or so of what you’d get several months later, and you can redeploy your money into something that might gain far more.
For what it’s worth, those who sold their PN on the acquisition announcement this summer, for slightly under the announced price, are (so far) a lot happier than those who held out hoping for either the full offer price or a bidding war.
I don’t know where the price is eventually going, but I do know that with NXP swallowing up Freescale and now Qualcomm swallowing up NXP, I’d be looking to get out of them.
Qualcomm made a lot of money with smartphones, but we all know that market ain’t growing, so QC is looking to buy their way in. QC’s automobile efforts with the Snapdragon haven’t gotten traction, but both Freescale and NXP are well entrenched in the mainstream automotive market.
It’s a smart deal of QC in that they get to use their foreign money to buy a foreign firm without paying US taxes on most/some/all of it, but you’ve essentially got 3 chip companies being combined with what has to be some pretty obvious redundancies, so expect lots of layoff announcements. And then there’s the integration risks. Where this actually ends up is more guess than science, at least for me, but then QC has always seemed to be more lawyer focused than engineer focused from my perspective.
I could be totally misreading this, and the resulting company could be a juggernaut in both the automotive and IOT space. I’m not an owner of any of these companies, so I’m content to continue to sit on the sidelines until things look more certain to me.