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Comment by goodoldneon | Hacker News Reader

Is it illegal for 51% of shareholders to dilute away the stake of the remaining 49%? Serious question -- I don't know.

AFAIK (IANAL), companies have few restrictions on stock dilution as long as the dilution is in the best interest of the shareholders. You can make a legally defensible argument that one actor is bad and should be diluted, but it's probably hard to make a legally defensible argument for selectively diluting shares of idle shareholders.

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The poison pill is done in advance. If you buy-in and trigger it, it's your own fault.

Yes, this is a self-dealing transaction since it is detrimental to certain shareholders and not others without getting the adversely affected shareholder's consent. This is what Savrin sued Zuck over in the early Facebook days.

Be careful about trying to reason from first principles on stuff like this. Poison pill plans are bog-standard settled corporate law. The legal principle is that the board has the right (/duty) to judge the value of the company, and the courts, in most circumstances, don't second-guess it. The board can (and routinely does) decide that offers to acquire the company must be routed through the board.

Plans like this are why Microsoft doesn't own Yahoo, and why Carl Icahn didn't buy Netflix.

seems arbitrary whats considered a "bad actor".

maybe i think climate activist shareholders in energy companies are hostile / bad actors. Can i selectively dilute them out?

Are they actively attempting a hostile takeover and the board thinks that they'll hurt the company? Then I think that'd be legal. Otherwise I don't see how you could make a legally defensible argument around diluting shareholders just because of their beliefs

https://www.cnn.com/2021/06/02/investing/exxon-shareholders-...

in this case yes. wonder why they dont

Why do you think they dont?

They were elected to the board by shareholders. That's entirely different than a hostile takeover. You can't say "this is not in the interest of the shareholders" when the shareholders voted for it

then lets dilute the shareholders who voted for it as theyh are clearly idealogically driven and actively hostile to the company itself or its profitability

Yea... you're stretching this one

i dont see why. isnt that why they are saying elon is bad? because hes driving for free speech?

why is it okay if its one person, or a few people, but >n bad actors is fine?

>seems arbitrary whats considered a "bad actor".

Well, I guess if you’re a moral relativist that might be the case. I mean, why not burn the rest of the planet down for temporary profits? Why not enslave children in the Congo? It benefits the shareholders after all. How about murder and torture for hire? These decisions just seem so arbitrary. *shrug*

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