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Matt Levine

Don’t Eat the Poison Pill By Mistake

Also insider trading, fraud and Ponzis.

Poison pills.

We talked yesterday about the “poison pill” stockholder rights plan that Papa John’s International Inc. put in place against its former chairman and dad, John Schnatter. The pill “will prohibit Schnatter from acquiring more than 31 percent of the stock,” I wrote, but I was cheating. That was a shorthand description. That’s not how poison pills actually work. It’s not like you go to the stock exchange and put in an order for 100 shares and it bounces back with an error message saying “that would put you over 31 percent.”