Stock offer will be becoming misleading to the shareholders of the target firms as value of the acquiring firm in the market may have been inefficiently discounted, and the share of acquisition for may have been overpriced in relation to their intrinsic value so it can be said that in the long run, when their share price of going to correct, then the shareholders of the target for my going to lose up on their overall shareholder value and hence it can be said that they can be leading to misleading offers to the target shareholders by offering of the stocks of the acquisition company and acquisition company may be trading at the overpriced value and when the acquisition has been done, then if the acquisition company share is going to correct on the downside, then its shareholders of target company, who have now become the shareholders of the acquiring company are going to lose up on their overall share holders value.

Hence, it can be said that the offer by providing stock to target company can be mispriced due to mispricing of the shares of acquisition company in the market.