People don’t always admit it, but insider trading is rampant in the corporate world. While this is obviously unfair and often very illegal, it can sometimes provide clues that your company is about to be acquired by another organization.
Management Doesn’t Seem to Care About Falling Stock Prices
Falling stock prices are always a sign that all is not well in your company, but it can be especially troubling if your management doesn’t seem to care if prices are down. In most cases, a company’s PR machine will go on the defensive and try to come up with plausible excuses for falling stock prices, but they won’t put that much effort into a company that’s about to be sold anyway. If management is strangely quiet about falling stock prices, it could be that they’ve all but finalized an acquisition and no longer have a stake in the company.
Stock Prices Fluctuate Wildly
Although cryptocurrency and tech stocks have conditioned modern investors to believe that stock prices constantly fluctuate, that isn’t the case. Most stocks have a market cap of less than $2 billion, and they don’t change a whole lot from one day to the next. If stock prices do drop by a significant amount in a day, it could be that your stock is being manipulated so that someone can come and buy the company out.
Stocks that suddenly jump in price can also indicate an impending buyout. Market makers are patient enough to let a company spend years in the red if they know that a buyout is on the way. This is known as buyout theft, and it is frighteningly common.
Resignations by Management
The resignation of a key company member can be seen as a bad thing when it happens in a vacuum. After all, if a company is doing well, why would an upper-level manager be so quick to leave? It could be that they know that are merger or acquisition is about to occur, and they want to get out while they still can. There could be any number of reasons why someone would want to leave, but this is often a sign of trouble, especially if there have been issues such as fluctuating stock prices or management that is being oddly silent about other goings-on.