That strategy is the acquisition of a value-priced company by a growth company. Using the growth company's higher-priced stock for the acquisition can produce outsized revenue and earnings growth. Even better is the use of cash, particularly in a growth period when financial aggressiveness is accepted and even positively viewed.he key public rationale behind this strategy is synergy - the 1+1=3 view. In many cases, synergy does occur and is valuable. However, in other cases, particularly as the strategy gains popularity, it doesn't. Joining two different organizations, workforces and cultures is a challenge. Simply putting two separate organizations together necessarily creates disruptions and conflicts that can undermine both operations.
If riding a bucking bronco is your idea of fun, youβre going to love what the stock market has in store. Consider this past weekβs ride a preview.The weekβs action didnβt look like much, if you didnβt know better. The Dow Jones Industrial Average rose 213.12 points or 0.6%, while the S&P 500 advanced 0.5%, and the Nasdaq Composite ended little changed.
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