What happens if my stock is affected by a merger?

A Merger and acquisition (M&A) deal is an event in which two companies combine to form a single entity. The scenario and the terms of the deal can vary greatly from case to case, but the most common type of M&A consists of a larger company acquiring and incorporating a smaller company.

If you hold stock in the acquiring company in a merger:

 The stock will continue to be offered and your positions will remain open.

If you hold stock in a company that is acquired as part of a merger:

All open positions of the acquired stock are closed, and we delist the asset from the etoro platform. Your Cash Available balance will reflect any profit or loss incurred from these trades.

M&A deals usually involve a payment of cash, stock, or a combination of both from the acquiring company to shareholders of the acquired company as compensation for their holdings.

Each M&A deal is unique and can be complex, however, generally speaking in the event of an acquisition, we handle the payment as follows:

• If cash is offered, positions are closed at the acquisition price outlined in the deal terms.
• If stock is offered, we don’t support replacing one stock with another, so positions are closed at the average liquidation value.
  
  Note: The final value you receive is based on the market price of the acquiring company’s stock at the time of liquidation, which can vary, and is typically processed after the pay date once the units are received by the liquidity provider (LP). During this period, the value of your position may move up or down in line with the acquiring company's share price. etoro does not guarantee the price at which liquidation occurs.
• If a combination of cash and stock is offered, the close rate is a combination of the above values.

On occasion, positions may be closed at a later date once payment is received from our liquidity providers. This delay may mean your position is closed at a different price than the one announced on the deal's pay date. etoro is not responsible for price changes that occur during this period.

In some cases, payment is accompanied by an untradeable asset such as contingent value rights (CVRs), which can lead to additional payment if certain conditions are met in the future.

In the event of a CVR distribution:

• Holders of positions secured with the underlying asset receive the CVR directly in the main portfolio.
• Holders of CFD positions are not eligible to receive CVRs. CFD positions will be closed at a value that reflects the last rate.

Learn how Stock Margin positions are handled in the event of an M&A.