How does this work when you buy stock and then the company is sold?

I recently bought stock in a troubled bank, cheap. The troubled bank has been bought buy another, larger bank, their stock is much more expensive. Will my stock now grow to the higher price? How does this work?





Thanks for your input.





|||Based on the merger agreement of your previous bank, you will receive prorated shares of the new bank. Read the merger agreement which you should receive in the mail. Usually, the first page describe the ratio under which the old shares are converted to the new shares.


For example, you owned 300 shares of the acquired bank. The merger agreeement specified the shares would be converted 3 to 1 ratio. You then will receive 100 shares of the new bank. If the purchase by the large bank is a "Cash Merger," you will receive a check based on how much the acquiring bank agreed to pay to the shareholders of the acquired bank.|||It will not grow to the same price of the other company, but you may get one share of the new company for every fifty or sixty shares of the old company. If this comes out to be less than one share, they will pay you for the fractional share.





If they only got a controlling interest, the old stock may still be traded on the pink sheets for just a few cents per share.