When an acquisition turns a stock into cash before the deal actually closes

The tax impact of a near-certain cash acquisition

This is educational content, not investment, tax, or legal advice. It is not a recommendation to buy or sell any security. Hire an adviser for personalized guidance.

At Basis Northwest 2026, Savina Rizova, Dimensional’s co-CIO, told a story about something strange her team had noticed in an equity portfolio they’d onboarded.

A stock in the portfolio was about to be acquired in a very public, all-cash transaction, but the previous manager had continued buying the name.

A manager might continue adding to a stock position if they were trying to minimize deviation from a benchmark, usually measured by something like tracking error.

But there are pre- and post-tax consequences to holding a stock being acquired, particularly if there’s a high probability the deal will close.

It’s generally sub-optimal for several reasons: