ShmoopTube

Where Monty Python meets your 10th grade teacher.

Search Thousands of Shmoop Videos


Board of Directors Videos 111 videos

Finance: What is a Dividend?
1777 Views

What's a dividend? At will, the board of directors can pay a dividend on common stock. Usually, that payout is some percentage less than 100 of ear...

Finance: What is Bankruptcy?
260 Views

What is bankruptcy? Deadbeats who can't pay their bills declare bankruptcy. Either they borrowed too much money, or the business fell apart. They t...

Finance: What are Passive Investing and Passive Investors?
2 Views

What are Passive Investing and Passive Investors? Passive investing and passive investors are ones who opt to ride the market out over the long ter...

See All

Finance: What is a poison pill? 4 Views


Share It!


Description:

There are two types of "poison pills" - flip-ins, which allow shareholders to buy at a discount, and flip-overs, which allow them to buy shares after a merger.

Language:
English Language

Transcript

00:00

Finance allah shmoop what is a poison pill O romeo

00:08

romeo Wherefore out the ac Well if you can't have

00:12

me nobody can have me pill lug dead dead alright

00:17

that's poison pill allah romeo and juliet and performed by

00:20

your friends here and the corporate version Well it isn't

00:23

all that different In fact there are really two flavors

00:25

of poison pill flintstones chewable lt's called flip ins which

00:29

allow current shareholders to buy a ton more shares at

00:33

a big discount toe where their shares are currently trading

00:36

flippen like if the shares are at forty bucks each

00:39

current shareholder than gets allowed to buy five shares for

00:42

ten bucks each for each share that they currently own

00:45

and have owned for the last in a year About

00:48

that would be a flipping well this flip in process

00:51

dilutes the company dramatically making it harder for an outside

00:55

takeover soldier to come in and you know just buy

00:57

the company that's a flip in the non chewable flintstone

01:01

flavor that you have to actually swallow is called ah

01:03

flip over which comes is a mandate from the board

01:07

allowing current shareholders to buy the shares of the acquirer

01:11

After the merger at a big discount it basically destroys

01:14

enormous value in the combined company making It tastes like

01:17

a bitter moth to ah hungry bat so you know

01:21

he spits it out The basic idea in these poison

01:23

pill defense strategies is to deal with hostile takeovers And

01:28

a lot of those came during the junk bond era

01:30

in the nineteen eighties when cheap high risk capital was

01:33

liquid Lee easily available almost anywhere and companies felt vulnerable

01:39

to short term quick buck wall street sharpies who looked

01:42

great in a dark suit and usually had awesome hair

01:45

So yeah people for details carefully watch wall street the

01:48

first one the good one the one with michael douglas

01:51

when he still had hair and what you don't really 00:01:54.212 --> [endTime] hear there is he said Shmoop is good yeah

Related Videos

GED Social Studies 1.1 Civics and Government
39794 Views

GED Social Studies 1.1 Civics and Government

Fake News
11938 Views

How do you tell fake news from real news?

Finance: What is Bankruptcy?
260 Views

What is bankruptcy? Deadbeats who can't pay their bills declare bankruptcy. Either they borrowed too much money, or the business fell apart. They t...

Finance: What is a Dividend?
1777 Views

What's a dividend? At will, the board of directors can pay a dividend on common stock. Usually, that payout is some percentage less than 100 of ear...

Finance: How Are Risks and Rewards Related?
589 Views

How are risk and reward related? Take more risk, expect more reward. A lottery ticket might be worth a billion dollars, but if the odds are one in...