It’s been a wild ride for big tech stocks!
Shares of the most popular growth stocks took it on the chin for three days straight, starting just one week ago.
The tech sell-off prompted a number of emails from our Rich Retirement Letter community asking if they should be preparing for another bear market.
And while I’m still very optimistic about our economy following the crisis, I can tell that there’s some fear starting to creep in.
You know who else is fearful?
The CEOs of many of these popular tech stocks!
As their stocks start to move lower, they’re in danger of losing one of the most important currencies to grow profits in a post-coronavirus world.
Today, I’ll explain exactly what these executives are worried about.
And I’ll show you how to set up your chance to book thousands in overnight gains when the executives make their moves.
It’s an exciting time to be looking at these opportunities!
The Best Use of an Overpriced Stock
As investors, we love it when shares of stocks we own surge higher.
But if that surge proves temporary and the stock trades back down to where it started, it can be extremely frustrating. It’s as if we squandered an opportunity to sell when our shares were valued at a much higher level.
There’s nothing like the regret of watching a big profit completely evaporate.
Company executives feel the same way when their shares surge higher and then start to return back to “normal” levels. Only instead of regretting selling shares, these executives often regret not using the high priced shares as buyout currency to take over another company.
You see, in the world of buyouts — when one company buys all the shares of another company — there are two basic currencies that can be used:
A buyout can go with a cash offer — where a company uses actual dollars to purchase all outstanding shares of the takeover target.
Or a buyout can go with a stock offer — where a company issues its own shares to pay for the buyout. And the higher the price of a company’s shares the more buying power a company has for the takeover.
As big popular stocks like Amazon, Alphabet and Tesla rocketed to new highs over the summer, CEO’s of these companies had an opportunity to start negotiating buyout deals using their inflated stock price as buyout currency.
But as long as these largest stocks continued to trade higher, there wasn’t much of a sense of urgency. After all, every week it seemed like these stocks were hitting new highs. So just waiting a bit longer allowed this “buyout currency” to become even more valuable.
Last week, this tide started shifting.
And as tech stocks started sliding, CEOs began to feel the urgency to get buyout deals done.
Now that there’s a clear risk that shares of these biggest companies could give up some of their gains, the clock is ticking to use the high stock prices as a tool to buy out competitors, suppliers and other companies that can help with profit growth.
Here’s what this means for you…
How Buyout Deals Can Turbo-Charge Your Retirement Profits
One of the reasons I love buyout deals so much is because they can be extremely lucrative for us as investors.
You see, when a buyout transaction is announced, shares of the company being bought typically surge higher.
That’s because a big company like Amazon or Tesla needs to offer a price much higher than the current price of a stock being bought out. That way, the investors in this company will have an incentive to approve the deal.
So buyout deals typically lead to big overnight stock gains once the announcement is made and investors realize that their shares are being bought at a higher price.
If you can figure out which companies are going to be bought out and invest in these plays early, you could walk away with huge overnight profits when the deal is announced.
That’s exactly what my team and I are working on. And in the coming days and weeks, you’re going to hear a lot more about the buyout opportunities that we uncover!
So as we watch volatility re-enter the market and see some of the biggest tech stocks swinging back and forth, just remember that this action is likely to spur some big buyout deals.
And those deals could lead to big profits for your retirement.
It’s a good idea to keep some cash on hand for investing in these opportunities!