Contingent value rights
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A Contingent Value Rights (CVR) is a type of option that can be issued by the buyer of a company to the sellers. It specifies an event, which, if triggered, lets the sellers acquire more shares in the target company.
The New York Times claims[1] it harms both the sellers and the buyers, since it could cause the CVR issuer to make a big payment in case the event is triggered and the underlying stock price is high, or leave the holder of the CVR with worthless shares in case the stock price plunges.
[edit] References
- ^ Foley, John (2008-12-26). "Ignominious Seven From 2008". The New York Times. http://www.nytimes.com/2008/12/26/business/26views.html. Retrieved 2008-12-27.
[edit] External links
- [1] - CVR on Investopedia
- [2] - Contingent Value Rights in Acquisitions: Theory and Empirical Evidence
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