Shares of Eidos on the London Stock Exchange skyrocketed today, more than doubling following the announcement of a generous buyout bid by Japanese RPG giant Square Enix.
Closing at only 14 pence yesterday, shares of Eidos stock on the London Stock Exchange are currently trading at 31.75 pence, or .25 pence below the 32 pence per share Square Enix has offered to buy out the company in their proposed £84.3 million bid for the troubled Tomb Raider publisher. The market opened today with a sale of 178,000 shares selling at 27 pence per share, with more than 16 million shares changing hands as of this writing.
The jump is of course a direct result of Square Enix's bid, as both individuals and arbitrageurs - companies that buy large amounts of stock in order to secure small but high-volume profit with minimal risk- rush to grab as much Eidos stock as possible before the deal goes through.
While the deal isn't 100% in the bag, it's a much safer bet than investing in Take-Two Interactive stock turned out to be following Electronic Arts' failed takeover bid last year.
As an outsider to the financial world, it's a fascinating process to watch. One company makes an offer on another, and then the stock prices rise to meet that offer in the hopes of making a small profit. Once you start to make sense of the charts, it really is quite interesting. Head over to the London Stock Exchange website to experience the hot stock drama.