What is a 'poison pill' strategy & why has Twitter adopted one?

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Business Standard What is a 'poison pill' strategy & why has Twitter adopted one?

A poison pill strategy gives existing shareholders the right to purchase additional stock at a significant discount, thus diluting the holdings of a new, hostile investor. It is officially known as a shareholder rights plan. Twitter’s poison will stay in place for a limited duration of one year. The shareholder who triggers the poison pill will be blocked from making these discounted stock purchases. Twitter’s pill would be triggered if a shareholder acquires more than 15% of the company in a deal not approved by the board.


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