Greenmail definitions
| Word backwards | liamneerg |
|---|---|
| Part of speech | Noun |
| Syllabic division | green-mail |
| Plural | The plural of the word greenmail is greenmails. |
| Total letters | 9 |
| Vogais (3) | e,a,i |
| Consonants (5) | g,r,n,m,l |
Greenmail is a controversial practice in the world of finance, primarily involving the buying back of a significant amount of a company's stock by the company itself in order to thwart a hostile takeover bid. This strategic move is made to prevent an unwanted acquisition of the company by an outside entity.
History of Greenmail
The term greenmail was first coined in the 1980s and gained popularity as a defensive strategy used by corporations facing hostile takeovers. It involves repurchasing shares at a premium from a corporate raider who is threatening a hostile takeover. The goal is to deter the raider from acquiring a controlling interest in the company.
Impact on Shareholders
Greenmail can have detrimental effects on other shareholders as it often rewards short-term investors at the expense of long-term shareholders. By paying a premium to the corporate raider, the company is essentially using shareholder funds to buy back shares at an inflated price.
Legality and Regulation
While greenmail is not illegal, it has faced scrutiny and criticism for being an anti-competitive practice. In response to concerns about greenmail, regulations and measures have been put in place to discourage companies from engaging in such tactics.
Greenmail can create a contentious environment among shareholders and raise questions about the fairness of corporate governance practices. It is important for investors and regulators to monitor and address any instances of greenmail to uphold transparency and protect the interests of all shareholders.
Greenmail Examples
- The company received a threat of greenmail from an activist investor.
- Greenmail is a tactic used by some corporate raiders to force a company to purchase their stock at a premium.
- The board of directors decided to pay off the shareholder to avoid greenmail.
- Greenmail can be a controversial practice within the business community.
- Investors may use greenmail as a way to profit from a company's vulnerabilities.
- The threat of greenmail can put pressure on a company's stock price.
- Greenmail can sometimes be seen as a form of blackmail in the corporate world.
- Shareholders may be divided on whether greenmail is beneficial or harmful to a company.
- Companies often seek legal advice on how to best handle a greenmail situation.
- The CEO was determined to resist any attempts at greenmail to maintain control of the company.