Expert: Paul Henneman - 6/3/2007

Question
When companies decide to go private, and let's say the stock price is at $8.00 and they offer you $10.00 for your shares. When would be the best time to buy after they file its SEC filing saying that they will be conducting a transaction to go private? Thank you.

Answer
Calvin,
  Thank you for your question! Typically it is too late to benefit from buying a stock after a company has already declared that it is going private. There are two reasons. Usually trading is no longer active, and the overall market is very quick to adjust the trading price, so it is almost always nearly exactly at the announced level.
   Usually a company goes private when they no longer want to support the incredible legal and accounting costs that are required to sustain a public offering. There may be some rumors about before a company does declare it is going private, but it is rare. Typically the decision comes and the stock will move to the declared price far too quickly for you to benefit from it.
   Better things to look for are expected stock splits or company buyback announcements. Even these are difficult to find out about in advance, and once they happen it is too late for the average individual investor to take advantage of.

I hope that this helps! Please do not hesitate to follow up with me if I can be of any further assistance,

Sincerely,
Paul Henneman
President
ValuEngine Inc
www.ValuEngine.com