Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Acquiree

What it is:

An acquiree, also called a target, is a company that is purchased by an acquirer.

How it works (Example):

Company XYZ has developed a powerful, new search-engine widget. Several search-engine companies may be interested in purchasing Company XYZ to keep Company XYZ's technology proprietary, and so Company XYZ may become an acquiree.

Why it Matters:

It's not always easy to tell which companies are good targets, but if a company is struggling or it has a large amount of cash on its balance sheet, it's likely that other companies are evaluating the company as an acquiree. Some potential acquirers will take the next step of purchasing shares, and if they purchase more than 5% of those shares, they must report the purchase to the Securities and Exchange Commission if the acquiree is a public company. This often triggers a flurry of trading activity in the target's stock.

Related Terms View All
  • Auction Market
    Though most of the trading is done via computer, auction markets can also be operated via...
  • Best Execution
    Let's assume you place an order to buy 100 shares of Company XYZ stock. The current quote...
  • Book-Entry Savings Bond
    Savings bonds are bonds issued by the U.S. government at face values ranging from $50 to...
  • Break-Even Point
    The basic idea behind break-even point is to calculate the point at which revenues begin...
  • Calendar Year
    If Company XYZ starts its fiscal year on January 1 and ends its fiscal year on December...