Following activist investor Carl Icahn’s purchase of a 10% stake, Netflix has adopted a shareholder rights plan — also known as a "poison pill" — to deflect hostile takeovers, reports the Los Angeles Times’ Company Town blog.
The move was designed to protect the streaming and rental service from outside bids that are "not in the best interests" of the company or shareholders, the story notes, citing Netflix.
Icahn responded by calling the plan "an example of poor corporate governance."
Under the plan, the poison pill would be triggered if an individual or group tried to purchase a large piece of the company without its board’s approval. If such a purchase happened, Netflix would issue new shares, flooding the market and making a takeover extremely costly, the story notes.