What is Warehousing?
Warehousing is the process of accumulatingin a company for the purpose of eventually acquiring the firm.
How Does Warehousing Work?
Let's say the John Doe tender offer for the right now, it simply starts buying a few thousand here and a few thousand shares there over the next 12 months. In other words, it begins warehousing the shares.is thinking about acquiring a controlling interest in Company XYZ next . Rather than make a big
Why Does Warehousing Matter?
Warehousing accomplishes several things. First, it allows a potential acquirer to take advantage of short-term dips in the target's share price (in other words, it buys when they're 'on '). Second, it avoids having to buy big blocks of shares in one fell swoop, which can make the price spike and reveal the company's real intentions. Accordingly, warehousing allows a company to fly 'under the radar' for a time. However, the SEC does require anyone who exceeds a 5% ownership threshold to file a form 13G or 13D, which means the size of the company's position eventually become public and trackable by others.