Takeover news can be both favorable and unfavorable, depending if the company is the one issuing the offer or the one receiving the offer. The amount offered or rumored to be transacted plays another part. So this is the logic: when company A pays a premium buying company B, share prices of company B will roar upwards while company A’s shares may plunge (due to the ridiculous offer) or surge (due to it being a great acquisition).

After Broadcom (AVGO) was recently disallowed on its attempt to take over Qualcomm (QCOM), Qualcomm’s share prices tumbled immediately through the public’s disappointment. Then again, Broadcom must have seen something in Qualcomm to be interested. Broadcom may not be able to buy Qualcomm but there is nothing stopping us investors?

Relating to a recent event, Shire (SHP) has been taken negatively by investors due to the high premium it paid taking over Baxalta …