Hi, My company (Discovery) is soon going to be merged with Warner Brothers https://www.hollywoodreporter.com/business/business-news/warner-bros-discovery-merger-board-details-1234955681/ This is my first time being an employee of a company in merger phase. Any advice to its employees about company stocks that they own? Currently have good enough RSUs awarded to me as performance bonus (partially vested). I am a complete n00b wrt stocks. So, any advice is really appreciated. Any other advice wrt upcoming merger is also highly welcomed. #investments
You will likely be issued new stock at some ratio of old:new. This is generally a calculation done by the banks handling the merger and reflects valuation estimates and outstanding shares. For the most part it should have no impact on the value of your shares (in the immediate term). Ex: 1 share old co @ $50 becomes 2 shares new co @ $25. It is important to watch that ratio and it will be disclosed to you at some point (as with all shareholders).
Thanks this is very useful. We have been communicated that ratio will be 70:30. If I understand correctly Discovery stocks will have value reduced to 30% https://www.barrons.com/articles/discovery-stock-warner-media-51622580529 But by your explanation looks like our number of shares will increase at least in immediate future?
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Can’t give you specific advice around stocks but I always just sell them as soon as they vest. A lot of concentrated risk otherwise. As for mergers, I’ve been through two mergers in my career and have regretted sticking around for both of them. At the very least I would suggest you start preparing for interviews.
Thanks. What were your specific regrets?
Got laid off in a few months at the first company. Wasn’t part of the layoffs at the second one but had to suffer through a year of high attrition, demotivated employees and changing culture.