In: Finance
Review any current events/transactions that have taken place and have an opinion about them.
Describe 3 Business transactions in DETAIL. (M&A, IPO, stocks)
On Jul 9,2019 IBM closed buying Red Hat Inc. for $34 Bn. Red Hat was a major open source software provider. IBM buying is an example of acquisition in IT industry. Red Hat will a big asset in IBM's business portfolio and this should generate good amount of revenue to boost IBM's profit. However, IBM should be careful enough so that it should not treat the company in such a way that company becomes in efficient in profit making.
M&A (Merger and Acquisition): In case of merger two separate company joins and a new company forms which is a new legal entity than the parent company. In case acquisition one company buy out another company and sold company looses it's identity and becomes part of the acquirer company.
IPO ( Initial Public Offering): When a private limited company needs money for expansion, then company goes to public to issue equity shares for the first time. The first offering equity to public is called IPO. IPO is an important source of primary finance in capital market.
Stocks are generally referred to as the company's common stock. Stocks owner's the owner's of company and they have the voting right to decide company's strategic decision.