Usually the stock of the company being acquired will rise to approximately the price being offered to buy it. It may stay a little below the price offered because of the risk the deal will fall through. The stock of the buyer usually falls because money goes out of the company and the risk of what will happen after the acquisition. Will the company increase revenues and profits in the future or not.

when a buyout occurs, its almost always the company being acquired that gets the spike. the acquirer tanks because most persons will decide the price paid is excessive.

market perception on how each shareholder does in the deal, that's all

It was announced that Dollar Tree acquired Family Dollar today but Family Dollar got the huge price increase. I'm new to stocks so I don't know much but doesn't the acquisition make Dollar Tree more valuable moving forward? Do people pile on the Family Dollar stock because their shares that get converted to Dollar Tree shares are more valuable?

Same scenario with Zillow and Trulia earlier this week, however in that case, Zillow got a decent price increase as well?

Thank You!