system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: What happens if someone has stock in a company that is eventually bought by a larger company?
gpt
It depends on the structure of the deal.

Sometimes the larger company pays cash for the stock. They usually offer a higher price than the current market price and the shareholders will vote. If a majority vote in favor, the larger company buys *all* of the stock (whether or not any individual voted in favor of the deal) at the offered price. So the shareholder gets cash.

Other times, the larger company offers their own stock instead, swapping a certain number of shares for a certain number of their own. For example, the larger company might offer to buy the smaller company by giving out one of their own share for three of the smaller company's shares. In this case, (if the majority of the shareholders vote in favor) all the share holders will have their shares converted into the larger company's shares. In the above 3:1 example, a shareholder who had 3,000 shares of the small company's stock would receive 1,000 shares of the larger company's stock.