Understanding "allow Mergers"

Models
1

I would like to get a better understanding of what happens when allow acquisitions is set to NO

  • are the acquired and acquirer both taken off the table or just the acquired?

I currently have a model that has both CELG and BMY at acceptable ranks, but only BMY is allowed in by the Simulation

2

Just the acquired.

The problem that the mergers flag was intended to fix was when you would buy a stock for $38 and then sell it three days later for $38.02.

That’s not going to happen with the acquirer. The acquirer’s stock usually isn’t affected by the merger. Or rather it is, but in a more unpredictable way, based on the market’s opinion of the overall combination and how it values the deal.

3

thanks Paul