Editing Shareholder rights plan (section)

==History==
The poison pill was invented by [[mergers and acquisitions]] lawyer [[Martin Lipton]] of [[Wachtell, Lipton, Rosen & Katz]] in 1982, as a response to tender-based [[hostile takeovers]].<ref>Harvard Business School, Case Study 9-496-037, page 5</ref> Poison pills became popular during the early 1980s in response to the wave of takeovers by [[corporate raid]]ers such as [[T. Boone Pickens]] and [[Carl Icahn]]. The term "poison pill" derives its original meaning from a [[suicide pill|poison pill]] physically carried by various [[Espionage|spies]] throughout history, a pill which was taken by the spies if they were discovered to eliminate the possibility of being interrogated by an enemy.

It was reported in 2001 that since 1997, for every company with a poison pill which successfully resisted a hostile takeover, there were 20 companies with poison pills that accepted takeover offers.<ref>{{Cite web |url=http://www.cfo.com/article.cfm/3001307/2/c_3046510?f=insidecfo |title=Poison Pill Popping - CFO Magazine - October 2001 Issue - CFO.com<!-- Bot generated title --> |access-date=2004-09-14 |archive-date=2004-11-30 |archive-url=https://web.archive.org/web/20041130065949/http://www.cfo.com/article.cfm/3001307/2/c_3046510?f=insidecfo |url-status=live }}</ref>  The trend since the early 2000s has been for shareholders to vote against poison pill authorization since poison pills are designed to resist takeovers, whereas from the point of view of a shareholder, takeovers can be financially rewarding.

Some have argued that poison pills are detrimental to shareholder interests because they perpetuate existing management. For instance, [[Microsoft]] originally made an unsolicited bid for [[Yahoo!]], but subsequently dropped the bid after Yahoo! CEO [[Jerry Yang (entrepreneur)|Jerry Yang]] threatened to make the takeover as difficult as possible unless Microsoft raised the price to US$37 per share. One Microsoft executive commented, "They are going to burn the furniture if we go hostile. They are going to destroy the place." Yahoo has had a shareholders rights plan in place since 2001.<ref>{{cite news|title=Yahoo weighs up options|url=http://www.ft.com/cms/s/0/6445d618-d293-11dc-8636-0000779fd2ac.html?nclick_check=1|newspaper=[[Financial Times]]|access-date=2008-02-03}}</ref> Analysts suggested that Microsoft's raised offer of $33 per share was already too expensive, and that Yang was not bargaining in good faith, which later led to several shareholder lawsuits and an aborted proxy fight from [[Carl Icahn]].<ref name="msft_withdrawl1">{{cite web|title=Microsoft Withdraws Proposal to Acquire Yahoo!|url=http://www.microsoft.com/presspass/press/2008/may08/05-03letter.mspx|publisher=[[Microsoft]]|access-date=2008-05-03|archive-date=2008-05-05|archive-url=https://web.archive.org/web/20080505074724/http://www.microsoft.com/presspass/press/2008/may08/05-03letter.mspx|url-status=live}}</ref><ref>{{cite news|title=Microsoft's Failed Yahoo Bid Risks Online Growth|url=https://www.nytimes.com/2008/05/05/technology/05soft.html?_r=4&hp&oref=slogin&oref=slogin&oref=slogin&oref=slogin|newspaper=[[New York Times]]|access-date=2008-05-06|first=Steve|last=Lohr|date=2008-05-05|archive-date=2009-04-15|archive-url=https://web.archive.org/web/20090415233507/http://www.nytimes.com/2008/05/05/technology/05soft.html?_r=4&hp&oref=slogin&oref=slogin&oref=slogin&oref=slogin|url-status=live}}</ref> Yahoo's stock price plunged after Microsoft withdrew the bid, and Jerry Yang faced a backlash from stockholders that eventually led to his resignation.

Poison pills saw a resurgence of popularity in 2020 as a result of the [[COVID-19 pandemic|coronavirus pandemic]]. As stock prices plummeted due to the pandemic, various companies turned to shareholder rights plans to defend against opportunistic takeover offers. In March 2020, 10 U.S. companies adopted new poison pills, setting a new record.<ref>{{cite news |title=Coronavirus-stricken U.S. companies pop poison pills |url=https://www.reuters.com/article/us-health-coronavirus-poisonpills-analys/coronavirus-stricken-u-s-companies-pop-poison-pills-idUSKBN21C344 |date=March 25, 2020 |first=Svea |last=Herbst-Bayliss |work=Reuters |access-date=April 16, 2020 |archive-date=April 1, 2020 |archive-url=https://web.archive.org/web/20200401234352/https://www.reuters.com/article/us-health-coronavirus-poisonpills-analys/coronavirus-stricken-u-s-companies-pop-poison-pills-idUSKBN21C344 |url-status=live }}</ref>

The [[Twitter]] Board of Directors unanimously enacted a shareholder rights plan in 2022 following an unsolicited [[Acquisition of Twitter by Elon Musk|purchase offer from Elon Musk]].<ref>{{cite news |last1=Soon |first1=Weilun |title=Twitter's board detailed its poison-pill defense against Elon Musk and 'unfair takeover tactics' |url=https://www.businessinsider.com/twitter-confirms-poison-pill-against-elon-musk-more-bidders-emerge-2022-4 |access-date=19 April 2022 |work=Insider |date=19 April 2022 |archive-date=19 April 2022 |archive-url=https://web.archive.org/web/20220419060158/https://www.businessinsider.com/twitter-confirms-poison-pill-against-elon-musk-more-bidders-emerge-2022-4 |url-status=live }}</ref><ref>{{cite web |title=001-36164 Twitter Inc. |url=https://d18rn0p25nwr6d.cloudfront.net/CIK-0001418091/a286d5af-613e-47a2-bfb2-97fb2423dd5c.pdf |publisher=UNITED STATES SECURITIES AND EXCHANGE COMMISSION |access-date=19 April 2022 |archive-date=18 April 2022 |archive-url=https://web.archive.org/web/20220418133653/https://d18rn0p25nwr6d.cloudfront.net/CIK-0001418091/a286d5af-613e-47a2-bfb2-97fb2423dd5c.pdf |url-status=live }}</ref> The purchase took place regardless in October 2022.