Mandatory offer and price movements..

hotstock · 1 Mandatory offer and price movements.. Wed Feb 02, 2011 11:33 am

hotstock

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i'm bit confused with LALU

Mr DP has made a mandatory offer for 41 pershare but last few days it touched 72 after the announcement before the price band..

can someone help me out to understand why price goes up even though there is a mandatory offer announced which is about 20% below the trading price..

Meta Trader · 2 Re: Mandatory offer and price movements.. Wed Feb 02, 2011 11:52 am

Meta Trader

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hotstock wrote:i'm bit confused with LALU

Mr DP has made a mandatory offer for 41 pershare but last few days it touched 72 after the announcement before the price band..

can someone help me out to understand why price goes up even though there is a mandatory offer announced which is about 20% below the trading price..

punters always see the mandatory offer as a support level . so the price will not go down beyond offer level . so people want to grab it in the lower level but gradually price will increase as more people enter. when punters leave it for the next gem it will come down,

milanka · 3 Mandatory Offer. Wed Feb 02, 2011 12:33 pm

milanka

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With the Mandatory offer the free float would decrease. I mean the number of shares in the trading floor would be less. This is causing the price to Go up. (demand and Supply theory) also in this case the offer is from DP. With his ability the company would perform better. Due to future earning potential the share is moving up . That is the reason I think.