Calculate Your All-Stock Merger Share Range

The trap in an all-stock exit is the headline number. It makes the deal feel priced, but your converted share count may still be moving before close. The rule is simple: read the exchange-ratio clause, the part that says how many buyer shares each target share becomes, before you model anything.

The headline value is not your share count

IonQ agreed to purchase Elisity in an all-stock deal with a maximum value of $1.3 billion. Elisity is a Zero Trust security company that started in 2019 and now has over 100 customer deployments worldwide. The acquisition can include an additional $150 million earnout, or extra value paid later, if Elisity's business meets performance conditions. Those facts describe the company-level price, not the number of acquirer shares that will land in an employee account.

The word up to matters: a maximum deal value is a ceiling, not a promise that every target share will be worth the same amount at closing. The conversion clause, not the headline, is the document you need.

An all-stock merger can set the conversion in two ways. A fixed exchange ratio turns your startup shares into a single number of acquirer shares. A formula, often built around a volume-weighted average price, gives a floor and a cap for the converted count.

The exchange-ratio clause tells you the real number

Open the merger agreement and find the section that says how target shares convert into buyer shares. You are done when you can quote a sentence in plain words: a fixed ratio, a formula, or a reference to a price. If the clause says the number is set at closing, stop using today's stock price and start using the numbers in the clause.

Find the reference price. Name the price window and the measurement date. IonQ will set the share count at closing by using the 20-trading-day VWAP of IONQ common stock for the 20 trading days before the third business day before closing, without counting that third business day. The timing rule matters because the number is not set when the deal is announced.

Check for a collar. Write down two numbers: a floor and a cap. A collar means the reference price cannot move outside a band. In this deal, the reference price is limited to a maximum of $49.61 and a minimum of $33.07 per share. That band is the part of the clause that turns your share count into a range.

The collar becomes a floor and a cap

If you hold options, confirm whether they are vested before you calculate. Vested options may convert into acquirer shares, while unvested options may be treated differently. The conversion math starts only after you know the number of shares you actually own or will own at closing. If your options have an exercise price, include that price in the dollar value you will divide.

Take the dollar consideration assigned to your vested equity. That is the dollar value you will divide. If the agreement gives you a fixed dollar amount, use that amount. If it gives you a share count times a reference price, use the resulting dollar amount. The floor share count is that consideration divided by the floor price. The cap share count is that consideration divided by the cap price.

• Fixed exchange ratio? Your converted count is one number.
• VWAP formula? The count is set by a price window before closing.
• Floor and cap? Calculate floor shares as consideration ÷ floor price and cap shares as consideration ÷ cap price.

The common mistake is to use the current acquirer stock price. The collar can make that number irrelevant before close. If the reference price is capped, your cap share count is set by the cap price, not by the last trade you saw on your phone.

For this collar, put the floor and cap prices in the same note you share with your team.

Closing conditions can keep your range open

The share count may not be final until closing. In the IonQ-Elisity deal, the parties expect to close in the fourth quarter of 2026, but only if customary closing conditions are satisfied, including regulatory approval. Your range can remain open for months. Keep the collar, the measurement date, and the closing conditions in that note.

Keep the earnout out of the base conversion math. Model it as a separate upside case, not part of the floor or cap, so your base range stays clean.