As per Accounting Standard 14, there can be two types of amalgamation: Amalgamation in the nature of merger: When the assets and liabilities of the companies are genuinely pooled, as well as the interest of the companies and shareholders, is also combined, then it is called an amalgamation in the nature of merger.

Amalgamation is a way to acquire cash resources, eliminate competition, save on taxes, or influence the economies of large-scale operations. Amalgamation may also increase shareholder value, reduce risk by diversification, improve managerial effectiveness, and help achieve company growth and financial gain.

Amalgamation is the consolidation or combination of two or more companies known as the amalgamating companies usually the companies that operate in the same or similar line of business to form a completely new company whereas merger refers to the consolidation of two or more business entity to form one single joint …

A merger is the voluntary fusion of two companies on broadly equal terms into one new legal entity. The five major types of mergers are conglomerate, congeneric, market extension, horizontal, and vertical.

The objectives as well as the benefits of a merger or an acquisition are numerous: to mitigate the weaknesses of either business and to bolster their combined strengths, to remove a competitor or threat within their industry, or to undergo a period of exponential growth in a short space of time.

In cash mergers or takeovers, the acquiring company agrees to pay a certain dollar amount for each share of the target company’s stock. The target’s share price would rise to reflect the takeover offer. After the companies merge, Y shareholders will receive $22 for each share they hold and Y shares will stop trading.

Merger arbitrage managers typically buy stocks of takeover companies after that initial pop and then sell a day or two before the sale is final. As the deal gets closer to completion, the stock price should inch higher to $20, eventually giving investors a 10 percent return.

At merger time, SPAC shares maintain their $10 nominal value. But their real value soon drops due to dilution when the merger occurs. For all shareholders, dilution arises from paying the sponsor’s fee in shares (called the “promote,” often about 20% of the equity).

Day’s Range: $0.15 – $0.18 per share. 52 Week Range: $0.04 – $0.22 per share. Average Volume (3 months): 5,989 shares per day. Market Capitalization: $1.5 million.

In this article

• Introduction.
• Watch the money flows.
• Spikes in trading volume.
• See what management has done with previous companies.
• Their name, product, or industry keeps coming up.
• Bank on increasing market share.
• Welcome smaller slices of larger pies.
• Higher highs, higher lows.

Favorable company announcements are often the catalysts for a substantial rise in the price of a penny stock. They pump the stock by sending out stock tips touting the stock’s imminent rise in price, and when the price rises, they dump their stock on the market to take profits.

You know Amazon, right? Did you know it was once a penny stock? At its IPO in 1997, it was under $2 per share.

Stock prices change everyday by market forces. If more people want to buy a stock (demand) than sell it (supply), then the price moves up. Conversely, if more people wanted to sell a stock than buy it, there would be greater supply than demand, and the price would fall. Understanding supply and demand is easy.

Economic systems can be categorized into four main types: traditional economies, command economies, mixed economies, and market economies.