This paper examines whether managerial objectives drive bad acquisitions. Using a sample of 327 U.S. acquisitions between 1975 and 1987, the authors find that three factors systematically reduce the announcement day return of bidding firms: diversification, buying a rapidly growing target, and poor manager performance. These results support the idea that managerial, rather than shareholder, objectives drive bad acquisitions. The study identifies two key aspects of acquisition strategies that reflect managerial objectives: buying growth and diversification. It also analyzes the relationship between bidders' past performance and their acquisition returns. The findings suggest that poor managers are more likely to make poor acquisitions, consistent with the notion that poor performance drives managers to try something new. The paper also finds that the market penalizes unrelated diversification more heavily in the 1980s than in the 1970s, coinciding with the rise of hostile takeovers. These results align with other studies showing that poor management quality is associated with lower acquisition returns. The authors conclude that managerial objectives significantly influence acquisition decisions, and that bad acquisitions are not just cases of information release or hubris. Instead, they are driven by managerial goals such as growth and diversification. The study highlights the importance of managerial objectives in shaping acquisition strategies and suggests that diversification is a bad idea in the 1980s.This paper examines whether managerial objectives drive bad acquisitions. Using a sample of 327 U.S. acquisitions between 1975 and 1987, the authors find that three factors systematically reduce the announcement day return of bidding firms: diversification, buying a rapidly growing target, and poor manager performance. These results support the idea that managerial, rather than shareholder, objectives drive bad acquisitions. The study identifies two key aspects of acquisition strategies that reflect managerial objectives: buying growth and diversification. It also analyzes the relationship between bidders' past performance and their acquisition returns. The findings suggest that poor managers are more likely to make poor acquisitions, consistent with the notion that poor performance drives managers to try something new. The paper also finds that the market penalizes unrelated diversification more heavily in the 1980s than in the 1970s, coinciding with the rise of hostile takeovers. These results align with other studies showing that poor management quality is associated with lower acquisition returns. The authors conclude that managerial objectives significantly influence acquisition decisions, and that bad acquisitions are not just cases of information release or hubris. Instead, they are driven by managerial goals such as growth and diversification. The study highlights the importance of managerial objectives in shaping acquisition strategies and suggests that diversification is a bad idea in the 1980s.