Baru Gold Corp V.BARU

RE:Real interesting: Baru Gold Corp. Adopts Shareholder Rights

[DowsingR0d]

FYI for those who doesn't know what "poison pill" plan is. 
It's a way for company to try and prevent and delay outside investors from buying out the existing group for cheap. Essentially those who have BARU shares now can buy more shares at a discount in the event a hostile group tries to buy up to 20%+ or beyond to gain control of the board.

OBVIOUSLY if someone is doing that the SP will fly thorugh the roof... it also means they figure this is worth WAY more than $20M.

Do your DD I'd be very long!

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Why is a shareholder rights plan called a "poison pill?"

 

To avoid being the target of a hostile takeover by a larger firm, a corporate board might adopt a defensive strategy called a shareholder rights plan. Such plans allow existing shareholders the right to purchase additional shares at a discount, effectively diluting the ownership interest of any new, hostile party. Most plans are triggered whenever one individual or entity obtains a certain percentage of total ownership, leading to the nickname "poison pill."

An example of a poison pill defense occurred in 2012, when Netflix announced a shareholder rights plan had been adopted by its board just days after investor Carl C. Icahn acquired a 10% stake. The new plan stipulated that with any new acquisition of 10% or more, any Netflix merger or Netflix sales or transfers of more than 50% of assets, existing shareholders can purchase two shares for the price of one.