Why Are Roku Investors No Longer Getting $160 a Share in a Bad Buyout?
In a cash-and-stock deal, it's often the latter that fails the investors being bought out.
Why Are Roku Investors No Longer Getting $160 a Share in a Bad Buyout?
Overview
It's been a wild week for Roku (NASDAQ: ROKU) investors. Shares of the smart TV operating system pioneer that soared 20% last Friday on reports of a potential buyout have fallen this week, despite an announced acquisition by Fox (NASDAQ: FOXA) on Monday.
Fox and Roku claimed that the definitive agreement values Roku at $160 per share, or approximately $22 billion in enterprise value. If you're wondering why Roku stock is trading below $140 right now -- a steep discount for a buyout expected to close in the first half of next year -- it's because the deal is now worth considerably less than the initial price tag. In fact, even before Monday morning's announcement, the deal was already worth slightly less than $160 per share. Let's break things down.
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Originally published at www.fool.com.
