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You should be given information before the merger actually takes place regarding the process you have to follow in order to secure your position within the merger. You might be given a few months or weeks before the merger actually takes place to buy or sell the stock before the entire transaction completes. People who buy the new stock right before the merger might be subjected to a higher premium than everyone else. Some people might not have full voting rights for the stock. Therefore, buying a stock just because it is going through a merger is not necessarily the best thing that you can do.
The overall point of this chapter is that a merger has to be reviewed well before deciding what you want to do. Review the prospectus of the company whose stock you will have after the merger completes. Sometimes the new stock could be worth less than the original stock you had. Maybe the new one might not have as positive a trend as what you are working with right now.
