[sonzohan]

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]

> 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?