Asked question on Money SE about conversation in Suits S04E04:

You do that, it triggers a stock split.

His shares double in voting power.

Yours don't.

My question:

I never really got that. If you own 20% of the stock just before the split, you own 20% of the stock just after the split; am I wrong?

User RPL says here:

it sounds like they are describing something akin to a "poison pill". In these arrangements, the "pill" is triggered by some predefined condition, say a party acquiring shares in excess of a defined threshold. What typically happens is that shareholders other than the ones who triggered the pill get a chance to buy shares at a substantial discount, thereby diluting the shares of the party that triggered it. Because the other shareholders have to buy their additional shares, albeit at a discount, and because it applies only to certain shares, it's not really a split, but it's close enough that the writers of the show may have felt it was worth using the term that is more familiar to the public.

So was Rachel Zane talking about a poison pill? If so what were the details in the series that support such? If not what was going on then?

You must log in to answer this question.

Browse other questions tagged .