A friendly piece of advice for a certain tech company being courted right now. In recent history, a telecom company turned down a $28 billion all cash offer and instead, had a twinkle in their eye and opted to take another offer that was $57 billion in …. stock. The result? A massive hangover.
To put it simply, cash is king, cash rules. Taking a stock offering over cash is not exactly a wise choice as the stock has no value until it’s sold, and there is no guarantee that the stock value will go to where you want it. Taking a cash offer gives the flexibility to then channel and invest where and how you want, and not be tied to a single stock waiting to rise. Trust me on this one.