This paper investigates the patterns of directors' trades and returns around takeover announcements. We find that the …

We hypothesize that corporate takeover markets create significant constraints for short sellers. Both short sellers and … upon a takeover announcement, resulting in losses for short sellers. Therefore, short sellers should require higher rates … of return when takeover likelihood is higher. Consistent with this prediction, the return predictability of monthly short …

While takeover targets earn significant abnormal returns, studies tend to find no abnormal returns from investing in … predicted takeover targets. In this study, we show that the difficulty of correctly identifying targets ex ante does not fully …