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Re: grey post# 2497

Wednesday, 06/08/2011 12:18:56 AM

Wednesday, June 08, 2011 12:18:56 AM

Post# of 2624
Its so clear that this stock was not what was going to be used to do the IPO...

This stock has a pill


What Does Poison Pill Mean?
A strategy used by corporations to discourage hostile takeovers. With a poison pill, the target company attempts to make its stock less attractive to the acquirer. There are two types of poison pills:

1. A "flip-in" allows existing shareholders (except the acquirer) to buy more shares at a discount.

2. A "flip-over" allows stockholders to buy the acquirer's shares at a discounted price after the merger. Investopedia explains Poison Pill
1. By purchasing more shares cheaply (flip-in), investors get instant profits and, more importantly, they dilute the shares held by the acquirer. This makes the takeover attempt more difficult and more expensive.

2. An example of a flip-over is when shareholders gain the right to purchase the stock of the acquirer on a two-for-one basis in any subsequent merger.

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