Poison pill
Etymology
A metaphor drawn from the suicide capsules spies were said to carry, to be swallowed rather than be captured. The corporate tactic was devised and named by the takeover lawyer Martin Lipton around 1982, typically as a shareholder-rights plan that floods the market with cheap new shares if a raider crosses a threshold.
noun phrase · /POY-zuhn pil/
A defensive measure a company adopts to make itself prohibitively costly or unattractive to a hostile acquirer.
What it names
A deliberate self-sabotage-as-defense — building in a trigger that punishes any takeover — turning vulnerability into deterrence.
Example
When the raider quietly bought fifteen percent, the board triggered its poison pill, diluting his stake overnight.
Related idea
The term has spread beyond finance to any clause deliberately inserted to make an agreement or acquisition unpalatable — a provision whose purpose is not to be used but to deter, much like a deterrent that works only if never triggered.
See also