Is there a good strategy to invest when two stock companies either merge or acquisition?
There's an old adage in the equities business - "buy on rumor, sell on fact".  Sometimes the strategy is to buy as soon as the rumor is out about a potential merger and then sell off into the news when it is actually announced, since this is normally when the biggest bounce occurs as part of a merger. The other part of the analysis you should do is to understand which of the companies benefits most (or is hurt the worst) by the merger and then make your play accordingly.  Sometimes the company being acquired will see a bounce while the acquiring firm takes a hit, which is an indication the experts think the acquisition will be a drag on the acquiring company (perhaps because it is taking on a great deal of debt to make the acquisition, or because the acquiring firm is paying too much of a premium for what it's getting in return).  Other times the exact opposite is true, where the company being acquired takes a hit while the buyer bounces, and again, the reasons for this can vary widely. If you wait until the merger is actually announced then by the time you get in, most of the premium from the announcement will likely have already been realized, and you'll be buying near the top of the market for the stock.  The key is to be ahead of the other sellers by seeing the opportunities before they do and then knowing when to get out before everyone else does.  Not an easy thing to pull off when you're trying to anticipate the markets, but it can be done if you do the right research and have patience. Good luck!
Below is an instruction that describes a task. Write a response that appropriately completes the request.

### Instruction:
Is there a good strategy to invest when two stock companies either merge or acquisition?

### Response:
There's an old adage in the equities business - "buy on rumor, sell on fact".  Sometimes the strategy is to buy as soon as the rumor is out about a potential merger and then sell off into the news when it is actually announced, since this is normally when the biggest bounce occurs as part of a merger. The other part of the analysis you should do is to understand which of the companies benefits most (or is hurt the worst) by the merger and then make your play accordingly.  Sometimes the company being acquired will see a bounce while the acquiring firm takes a hit, which is an indication the experts think the acquisition will be a drag on the acquiring company (perhaps because it is taking on a great deal of debt to make the acquisition, or because the acquiring firm is paying too much of a premium for what it's getting in return).  Other times the exact opposite is true, where the company being acquired takes a hit while the buyer bounces, and again, the reasons for this can vary widely. If you wait until the merger is actually announced then by the time you get in, most of the premium from the announcement will likely have already been realized, and you'll be buying near the top of the market for the stock.  The key is to be ahead of the other sellers by seeing the opportunities before they do and then knowing when to get out before everyone else does.  Not an easy thing to pull off when you're trying to anticipate the markets, but it can be done if you do the right research and have patience. Good luck!