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Any suggested reading to understand how these transactions work in practical terms? Does it depend on some sort of rules of the exchange or SEC rules? E.g. How

• sonzohan 2y ago
  Source: I worked at Blizzard and held Blizzard stock during the Activision merger, and then held ATVI stock during the Microsoft acquisition. Also a close friend of mine worked at Spunk during the Cisco acquisition. One of two things happen: a stock-for-stock exchange at a ratio (like 2 Blizzard becomes 1 ATVI stock), or a complete buyout and liquidation of the acquired company's stock. In the latter, you are basically sent a check based on the sale price agreed upon by the two companies. In the case of Nordstrom, shareholders receive $24.25 for each unit of stock they hold. The downside is you pay capital gains on it. In the case of my friend at Splunk, she is left with a horrifying tax bill that'll be in the upper-5 to lower-6 figures. What also happens is once the share price is agreed upon, the stock is priced in. As a result there is little point in shorting as the stock's price moves very little.
  • dghlsakjg 2y ago
    > she is left with a horrifying tax bill that'll be in the upper-5 to lower-6 figures. Isn't that because she was written a check well into the 6-figures?