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Thread: The Poison Pill Alternative

  1. #1
    john is offline
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    The Poison Pill Alternative

    Would it not be possible to vote for the extra shares and the RS, if there was a poison pill added to the vote to stop a take over of the company? I believe this would stop any concerns and would allow the vote to pass.

  2. #2
    Demian is offline
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    Shouldn't this be in the Stock Talk forum?

  3. #3
    jscreep is offline
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    Ouch! G-String Wedgie!! Pull it out!

  4. #4
    sxminvestor is offline
    Demian -

    Just curious, do you work for Sirius Buzz ?



    Can someone explain how the poison pill works. How do you just put something in place and wala, you can't be taken over in a hostile fashion ?

  5. #5
    Demian is offline
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    Quote Originally Posted by sxminvestor View Post
    Demian -

    Just curious, do you work for Sirius Buzz ?
    No, I don't work for SIRIUSBUZZ. I'm just trying to get specific conversation about the stock consolidated in the stock talk forum so it's not spread out all over the place and easier for people to locate and find...

  6. #6
    john is offline
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    Demian, sorry did not think it mattered this is General Sirius Disscussion. This really has little to do with just the shareholders but the protection of everyone that has anything to do with SIRIXM. To include the people that work there, and the current subscribers.

    sxminvestor, It basically makes it to expensive/impossible for another company to come in and take over.


    P.S. I see it has been moved anyway, so the placement of it is moot now.
    Last edited by john; 10-21-2008 at 05:22 PM.

  7. #7
    sxminvestor is offline
    John -

    Thanks, but I still don't undersatnd how you can make something more expensive. The company is worth what is is worth at the market cap or enterprise value, no /

    If you could expand upon it, I'd appreciate or else don't worry (I'll search google for explanation)

  8. #8
    sxminvestor is offline
    Found this explanation on Google:

    Poison Pill

    A strategy used by corporations to discourage a hostile takeover by another company. 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. The "flip-over" allows stockholders to buy the acquirer's shares at a discounted price after the merger.

    1. By purchasing more shares cheaply (flip-in), investors get instant profits and, more importantly, they dilute the shares held by the competitors. As a result, the competitor's takeover attempt is made more difficult and expensive.

    2. An example of a flip-over is when shareholders have the right to purchase stock of the acquirer on a 2-for-1 basis in any subsequent merger.

    This is similar to the macaroni defense, except it uses equity rather than bonds.

  9. #9
    john is offline
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    sxminvestor, That is correct, but not the only thing that can be added. There are many other things that can be added (they can add to the corp. by laws), that are in a sense considered poison pills. That is the part that makes it impossible for a take over.

  10. #10
    Demian is offline
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    Wouldn't even the talk of a potential takeover boost the share price? The shareholders would have to approve it and it would have to be at a huge premium....would it not?

    I guess a hostile takeover would be a whole other story though...

  11. Ad Fairy Senior Member
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