Zoom’s acquisition of Five9
How does acquisition of a public company work? Zoom is apparently paying $14.7B for Five9 that is valued at $12.6B (already increased from the $11.7B that it was during announcement). The acquisition is going to happen a year from now subject to regulatory approvals. The stock exchange ratio is already decided (0.5533 Zoom stock per Five9 stock). What if Five9’s stock price appreciates significantly in the coming year? Doesn’t that undervalue the stock exchange rate decided? Any help with understanding the fundamentals would be appreciated. #zoom #five9 #acquisition #m&a
What does Five9 do?
It’s a contact center platform
Basically the stock stops trading on fundamentals and it's price will slowly converge to acquisition price as deal finalization gets closer and regulatory approval looks more likely.
The exchange ratio is 0.5533 Say hypothetically, if Zoom stock value goes down. For example, goes down to $200 which is the premium paid by zoom. In that case you gain nothing, right?
Five9? *googles feverishly*