what is a poison pill 
poison pills are a defense strategy used by the directors of a public company to prevent activist investors competitors or other would be acquirers from taking control of the company there are several types of poison pills the most common type is the flip in executed by issuing more shares to all shareholders except the offending acquirer thus lowering the amount of control they have or could obtain another goal is to force the entity trying to acquire the company to negotiate with the company s board for a buyout price courts have upheld poison pills as a legitimate defense by corporate boards which are not obligated to accept any offer they do not deem to be in the company s long term interest 1theresa chiechi investopedia