👉 An investor's weapon, often referred to as a "poison pill," is a strategic tool designed to make a company less attractive to hostile takeovers. This mechanism allows existing shareholders, typically small investors, to dilute their ownership by issuing additional shares at a discount, thereby reducing the potential bidder's stake in the company. The poison pill is usually activated when a certain threshold of shares is held against a hostile bid, and it can be triggered by various conditions such as reaching a specific ownership level or receiving a certain number of shares from other shareholders. This defensive tactic gives the target company's management more time to negotiate a more favorable acquisition deal or seek alternative solutions, protecting the company's autonomy and value.
