E.g. How do existing shareholders get paid out? What happens to shorts? Treasury shares? Options? RSUs?
It seems like it would be extremely complex.
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.
Isn't that because she was written a check well into the 6-figures?