4 ms·

>I don’t understand how any board can implement a “poison pill”, not just Twitter but Netflix and others, and not be found working against the interest of share

>I don’t understand how any board can implement a “poison pill”, not just Twitter but Netflix and others, and not be found working against the interest of shareholders. Can anyone help me understand? So let's say you put in a shareholder rights plan that allows all current shareholders to buy 10 new, discounted shares whenever a new shareholder reaches 20% ownership and for every share they buy from then on. That effectively dilutes that one owner without anyone else, and if they continue to buy it makes all the other shareholders much more money. That's not always legal, but it would help the interests of shareholders.

IMTDb 5y ago
> That's not always legal, but it would help the interests of shareholders. Except the guy at 19.9% trying to move up. Considering he has already invested quite a lot of money on the company, shouldn't the board also work for him ? Why should he be treated differently and his share give him different "rights" than others people share ?
- kolbe 5y ago
  You are digging in the wrong sandbox if your goal is to find ethical behavior.
  - salawat 5y ago
    If ethics cannot be found, arguably you have a toxic artifact in civilization, and tgereby a good shaking up is warranted.
blackoil 5y ago
More likely he'll withdraw offer and sell his stake, causing share price to drop and all shareholders losing real and potential gain.
- ameister14 5y ago
  The poison pill was mostly developed at a time when the alternative was him selling all the company assets and leveraging the company to load it with as much debt as possible then give out as large a dividend as he could before selling off the stock leaving the company insolvent and everyone out of work. So imagine a company taking $100 million in debt, giving all that out as a dividend then the stock price tanking through quick sales. Poison pill keeps the company going and avoids that fate.
  - salawat 5y ago
    ...Companies do not warrant immortality. I fail to see how a corporate vehicle being able to persist against those that have bought in sufficient stake to move policy makes any sense whatsoever.
  - gengelbro 5y ago
    And this course of events is certain why? Because you've stated so?
    - ameister14 5y ago
      Yeah, I didn't say anything about it being certain. I was outlining why it was developed.

IMTDb 5y ago

> That's not always legal, but it would help the interests of shareholders. Except the guy at 19.9% trying to move up. Considering he has already invested quite a lot of money on the company, shouldn't the board also work for him ? Why should he be treated differently and his share give him different "rights" than others people share ?

kolbe 5y ago
You are digging in the wrong sandbox if your goal is to find ethical behavior.
- salawat 5y ago
  If ethics cannot be found, arguably you have a toxic artifact in civilization, and tgereby a good shaking up is warranted.

blackoil 5y ago

More likely he'll withdraw offer and sell his stake, causing share price to drop and all shareholders losing real and potential gain.

ameister14 5y ago
The poison pill was mostly developed at a time when the alternative was him selling all the company assets and leveraging the company to load it with as much debt as possible then give out as large a dividend as he could before selling off the stock leaving the company insolvent and everyone out of work. So imagine a company taking $100 million in debt, giving all that out as a dividend then the stock price tanking through quick sales. Poison pill keeps the company going and avoids that fate.
- salawat 5y ago
  ...Companies do not warrant immortality. I fail to see how a corporate vehicle being able to persist against those that have bought in sufficient stake to move policy makes any sense whatsoever.
- gengelbro 5y ago
  And this course of events is certain why? Because you've stated so?
  - ameister14 5y ago
    Yeah, I didn't say anything about it being certain. I was outlining why it was developed.