What happens to my shares if the company gets bought?

You get paid. When one company acquires another, it buys every share, including yours, at the agreed price. If the deal is for cash, the shares disappear from your account on closing day and the cash appears. If it is a stock deal, your shares are swapped for shares of the acquirer at a set ratio. Some deals are a mix of both.

The price is usually a premium to where the stock was trading, often 20 to 40 percent, which is why a stock jumps on the day a deal is announced. After the announcement it typically trades a little below the deal price until closing, reflecting the small chance the deal falls through.

You do not have to do anything, though you may get a vote. Shareholders of the company being acquired usually vote on the deal, and the paperwork arrives by mail or email. Most people ignore it and the deal passes on the votes of large holders.

For taxes, a cash deal is treated as if you sold on the closing date, so any gain is taxable that year, even though you did not choose to sell. Stock-for-stock deals are often tax-free at the time, with your original cost carrying over to the new shares.