Following billionaire investor Carl Icahn's purchase of a 10% stake in Netflix, word is out that he may push the company to sell—so Netflix has opted for the "poison pill" approach. The company is giving shareholders the right to snap up more stock if any single shareholder acquires more than a 10% share of the firm, thus—in theory—diluting the value of shares, the Wall Street Journal reports.
The plan would make it very costly to buy up a controlling stake. Also known as a shareholder rights plan, the poison pill is standard practice for companies fighting a takeover, the New York Times notes. "Adopting a rights plan is a very reasonable thing to do in light of the recent, and stealth, accumulation of stock and options by an activist investor," a Netflix rep says.