Poison Pill
Version 1.0.0 · Updated 2026-07-30
CORE DEFINITION
When a company faces a hostile takeover, the board activates provisions (such as allowing existing shareholders to buy new shares at a low price), greatly diluting the acquirer's equity, making the acquisition as costly as swallowing poison.
SCAFFOLDING EFFECT
Reduce cognitive load
A metaphor for self-destructive defense. When facing external coercion (such as unreasonable KPIs, workplace bullying), if you can design a mechanism that makes the other party pay a heavy price even if they succeed (even if you also suffer), you may gain safe space for negotiation.
Anchor fast decisions
Triggering provisions dilute the acquirer's equity or increase debt, making hostile takeovers costly, thereby deterring or increasing bargaining power.
MINIMUM ACTION
In progress 0/4Practice this model in one real situation:
account_treeGenealogyexpand_more
menu_bookReferencesexpand_more
Source support: Explicit
- en.wikipedia.orghttps://en.wikipedia.org/wiki/Poison_pillverified
PRIVATE NOTES · Only visible to you
SAVED Q&A
ENTRY Q&A · Private saving available
Ask with a clear boundary
thinkingmodels answers from published entry context only.
Your question is sent to thinkingmodels. The answer uses public entry context only.
RELATED MODELS