Yes to both of your questions. There is grey ink, and they can use white/black on it to make it look shiny.

there is an example, there are many more if you search google.

IBM, ExxonMobil, Johnson & Johnson and Walmart all come to mind, but even those stocks have had periods where they underperformed the market. Past performance is not necessarily a predictor of future stock performance. You mentioned just one company ATT that is no longer the leader that it once was, but there are several former great companies whose stocks no longer perform as well as the market as a whole.

The holders of the company being taken over usually get a ratio of shares under the acquisition agreement and perhaps a small cash payment for odd lots of shares. No, if you have, say, a $20 per share stock and IBM at $80 buys your company in a bid of .25 shares of IBM for YOUR Company shares, then you will get 100 IBM shares for each 400 shares of YOUR company. It happens all the time when there is a strong general market. It should, generally, be viewed as good news in the IBM example. Many buyouts today are likely not going to be priced for the acquired company because it is a market in which mergers are being entered just to avoid liquidation bankruptcy.