tombo

Google Is Overpriced: Why Acquire On2 in an All Stock Deal?

Just so. When your company's stock is overvalued, the best thing you can do is use your overvalued stock to acquire undervalued companies, or else issue more overvalued shares on the market to get capital to expand internally.

When your stock is undervalued, you either use your extra cash to buy back your undervalued stock, or better yet, use your cash to acquire other companies that are even more undervalued than your own. You don't use your undervalued stock to acquire other companies.