Generally, when it comes to acquisitions, you want to buy in on the to-be-acquired company while it's low, but, only if the acquisition is guaranteed. (Also note that the acquisition might take months to unfold, so, you need to be willing to hold your position, or jump in at the last moment.)
In some cases, acquisitions can be cancelled, causing the stock to slump instead, as it's considered bad news. Hence, it's usually only beneficial if the investor had purchased shares long ago, while the price was low (this gives room for any possible cancellations midway).
i'd like to get in on the RAI's acquisition of LO, and bought some LO today, but since RAI is down as well, should I pick some of that up as well? I don't have any other consumer staple stocks, and could overweight that sector, but i prefer not to overweight a sector unless i can't decide which is the best stock in the given sector.
also, if RAI's acquisition of LO is approved, what happens to the shares of LO? do they become RAI shares?
