Pre-Rumor Premium

Pre-Rumor Premium defined: In an acquisition, the pre-rumor purchase premium is the amount paid per-share of a public company being acquired or taken-private that is over the amount the stock had been trading at on the public markets before reports of the acquistion began to leak in the press. For example, if an acquisition of XY Corp. is announced at $24 a share and it had previously been trading at $20 a share on the date the acquisition is formally announced, but XY Corp. stock had been trading at $12 per share before reports about the possible acquisition began to leak in press reports, the pre-rumor premium is 100%. (See also definition of “Purchase Premium”)

Above is a definition for “Pre-Rumor Premium” from PrivCo’s Private Company Knowledge Bank, the definitive online and e-book guide to private companies and private company deals.

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